The Risks of Overseas Outsourcing in Real Estate: The Hidden Dangers of Freelancers

Outsourcing overseas in the real estate industry can seem like an attractive cost-saving measure, but it brings hidden risks—particularly when freelancers are involved. While outsourcing can offer efficiencies, the real danger lies in hiring independent contractors instead of full-time employees. This practice exposes Australian real estate businesses to cybersecurity risks, unclear liability, and heightened chances of data breaches. Let’s delve into the dangers of freelance-based outsourcing and how you can protect your agency from these significant pitfalls.

“To outsource or not to outsource, that is the question.”

As property management costs rise, many real estate agencies in Australia have turned to overseas outsourcing to manage administrative tasks, client communication, and marketing. The benefits include:

• Lower operational costs
• Access to a global talent pool
• Round-the-clock support
• Flexibility without the HR burden

However, when outsourcing providers rely on freelancers, it complicates accountability and increases the risk of data breaches. Many real estate agencies may assume they're dealing with a stable workforce, only to find that critical tasks are being handled by independent contractors with little oversight. This can introduce serious security vulnerabilities. Below, we explore the key risks and offer strategies to mitigate them.

The Problem with Freelance-Based Outsourcing in Real Estate

In recent years, outsourcing has shifted from traditional providers with dedicated employees to vendors who subcontract work to freelancers, often without informing their clients. This is especially risky in the real estate industry, where personal client data, contracts, and sensitive property details are at stake. When freelancers handle these tasks, it introduces layers of legal and security challenges that real estate businesses may not be prepared for.

Key Risks

Lack of Control and Accountability

Freelancers are not subject to the same level of oversight as full-time employees, which can pose significant risks for real estate firms handling sensitive financial and client information. Without firm security protocols, it becomes harder to guarantee the protection of this data. Freelancers may be working from home or public spaces, using unsecured devices or networks. This increases the chances of data theft, breaches, or loss—issues that could severely damage the reputation of any real estate agency.

Legal Complexities and Liability

Determining liability in the event of a data breach becomes much more complex when freelancers are involved. If sensitive client data or financial details are compromised, is the freelancer, the overseas provider, or the Australian real estate agency at fault? This ambiguity can lead to lengthy legal battles and regulatory fines. In real estate, where trust and compliance are critical, this legal uncertainty could prove catastrophic.

Cybersecurity Threats

Freelancers often use personal devices, which are rarely as secure as company-issued equipment. Key risks for real estate agencies include:

• Unsecured IT infrastructure
• Difficulty in monitoring adherence to data protection protocols
• Increased risk of intentional or unintentional data leaks
• Lack of rigorous vetting of freelancers, particularly regarding their cybersecurity awareness

Given the sensitive nature of real estate transactions—dealing with financial data, legal contracts, and personal information—such lapses could lead to significant vulnerabilities. Statutory penalties for data breaches can run into millions, and real estate firms may lose insurance coverage if found to have neglected proper due diligence.

Mitigating the Risks

Strengthening Contracts

Agencies must ensure their outsourcing contracts clearly define the provider’s responsibilities, including how freelancers are handled. Contracts should:

• Specify liability in the event of data breaches
• Demand secure IT infrastructure and regular security audits
• Include non-disclosure agreements (NDAs) and strict data handling protocols
• Ensure the outsourcing provider has adequate insurance coverage
• Clearly establish jurisdiction for dispute resolution

Without these protective measures, real estate agencies may find themselves unprotected, with denied insurance claims after a breach.

Implementing Strong Cybersecurity Measures

Cybersecurity protocols must be enforced across all outsourced operations to protect client data, such as:

• Mandating the use of company-issued devices or secure, vetted provider equipment
• Enforcing the use of Virtual Private Networks (VPNs) and multi-factor authentication (MFA)
• Regular security training for all outsourced workers, including freelancers
• Auditing compliance with cybersecurity protocols

Real estate firms must be able to prove that their third-party providers are following proper procedures, as failure to do so could void insurance claims.

Thorough Vetting of Providers and Freelancers

Australian real estate agencies must rigorously vet outsourcing providers, requiring background checks, cybersecurity audit reports, and transparency around who is handling their data. It's critical to establish clear reporting lines for any security incidents, ensuring compliance with Australian and international privacy laws. Without thorough vetting, agencies risk engaging contractors who are unqualified or unaware of the risks, further exposing the business to potential data breaches.

Opt for Local Providers with Overseas Connections

When considering outsourcing, real estate agencies should engage with Australian providers who manage overseas teams directly. By choosing a locally registered and insured company, you ensure accountability under Australian law. This arrangement also makes it easier to enforce contracts, NDAs, and data protection measures in line with Australia’s stringent privacy legislation.

A trusted, legally-bound local partnership provides greater control and security over your outsourced operations, ensuring your client data remains protected.

Outsourcing? tempting cost-saving or higher risks!

Outsourcing overseas may offer tempting cost-saving opportunities for real estate businesses, but when freelancers are involved, the risks escalate. From cybersecurity threats to unclear liability and data breaches, the dangers can be far-reaching. Real estate agencies must take proactive steps to mitigate these risks by strengthening contracts, enforcing rigorous cybersecurity measures, and conducting thorough due diligence.

In an industry where trust is paramount, securing your operations through proper outsourcing practices is essential to safeguarding your business and reputation from costly pitfalls.

Shimazaki Sentinel is a leading provider of strategic and tactical cybersecurity services. We specialise in safeguarding digital assets, providing expert consulting, and offering managed services that ensure organisations stay protected in a constantly evolving cyber landscape. Our mission is to give businesses the clarity, confidence, and conviction they need to secure their future and thrive in the digital age. Trust Shimazaki Sentinel to keep you ahead of emerging threats with tailored solutions that prioritize your security and business continuity.

With over 25 years of experience in cybersecurity and intelligence across industries such as National Security, Mining & Resources, Finance, Telecommunication and Healthcare, Thomas Jreige is a leader in crafting innovative solutions in cyber security and technology. He offers strategic guidance to organisations of all sizes, helping them navigate digital risks with confidence. Thomas is an expert in practical, tactical protection and sustainable cyber security practices, aligning robust security measures with business objectives while promoting efficiency and innovation.