Hiring in-house gives you long-term retention of knowledge. The people learn the business domain over months and years, and that accumulated context sits in the building. The price comes in the form of time and rigidity: hiring well routinely takes several months, onboarding adds more time, and the payroll continues through the quiet quarters.
Full outsourcing means someone else is accountable for shipping: the partner staffs the project based software development, they manage the process, and they absorb the staffing risk. The model works when the outcome can be described and there is a decision maker with time for it. It works badly when nobody on your side owns the product, as the provider is not able to invent your business rules.
Staff augmentation is the middle option: you bring in developers and keep the management on your side. The main advantage is speed — the right specialist can start far sooner than a new hire — and it scales down as easily as it scales up. The catch is that your own leads need the capacity to direct the work. Without strong internal leadership, you end up paying for hours, not results.
Most of the time, the models mix. A frequent arrangement puts architecture, product decisions and core domain code with permanent staff, while an external team takes on the parts that are bounded and specifiable. The line is simple enough: keep what differentiates you, and outsource the well-trodden work.
A few questions resolve most of these debates. First: is what you are building a core competitive asset, real estate software development or a cost centre? Then: over what horizon does the work continue — months or years? Last: who owns it once the vendor leaves? Answer these three honestly and the appropriate option is normally clear.