All in house wherever possible.

I would only do remote on projects that didn't have the employee in direct contact with my clients (phone, ticket, email support etc...) And I would only pay on a presigned contract, per project basis.
Paying on a hourly basis for an employee that you cannot monitor is asking for trouble. I wish I could trust people to do their work while I wasn't watching from the corner of my eye, but unfortunately the internet just offers too many ways to waste time.