Independent Rental Owners and Operators Misconceptions

Independent Rental Owners and Operators Misconceptions

My understanding of the independent rental owner community, lovingly referred to as the IRO community, dates back to 2015 when I attended my very first Assembly of Delegates conference in San Antonio, Texas. At that time, I was just stepping into the national fold of the National Apartment Association (NAA).

 I sat in the gallery of the committee, alongside our Washtenaw Area Apartment Association executive, and was immediately captivated by the passion and leadership displayed by this group. 

To my surprise, I was accepted on the committee for the following year and have continued to serve since. In 2022, I was named the vice-chair of the Independent Rental Owner Committee for the NAA, and in 2024, I will assume the chair position. 

One of my primary goals is to engage in in-depth conversations surrounding the misconceptions that surround the independent rental owner community.

In this post, let’s dive deeper into the data and articles provided by NAR and NAA and let’s discover ways that we can support our local Michigan IRO communities. 

"Rental housing plays a vital role in communities across the country, providing millions of individuals and families with safe and comfortable homes." -Quote from NAA's IRO Perspective Column

 What Exactly Is an IRO?

Smaller rental portfolios, often referred to as "mom-and-pop" housing providers, define the core of independent rental owners (IROs). IROs are individuals active in both property ownership and management, often being on call 24/7 to assist residents and respond to emergencies. They invest their hard-earned savings in providing quality housing options, and contrary to popular belief, smaller owners make up the majority of the apartment industry.

"Among 49.5 million rental housing units in the U.S., nearly 46% of them are small rental properties of 1-4 units. Over 70% of the small rental properties (1-4 units) are owned by individuals, and about 70% are managed by the same owners, defined as mom-and-pop landlords." Quote from Mom and Pop Business Owners’ Day article.

 Operating on Narrow Profit Margins

IROs, much like the broader rental housing industry, don't operate on high-profit margins. A significant portion of their revenue goes back into the property and community, ensuring its operational sustainability for generations to come.

 IROs are Integral to Community

Independent rental owners are not distant operators; they are active contributors to our communities, often residing on-site at smaller communities. They play diverse roles in society beyond being property owners, and they are deeply committed to the well-being of their communities.

"Linda Morris, a member of the NAA IRO Committee and President of Cambridge Management Company said, 'As a rental property owner, we take pride in providing homes where our residents enjoy living.'" 

As we reflect on the realities of the rental housing industry, it is crucial to dispel misconceptions and acknowledge the contributions of IROs. These dedicated individuals, who comprise the majority of the industry, provide diverse housing options and invest in their communities. 

By recognizing the financial constraints they face and the positive impact they have on communities, we can foster a more accurate understanding of the rental housing industry. Let us celebrate the essential role IROs play as neighbors, professionals, community members, and housing providers.

 What’s Next

In the coming months, this column will continue to explore unique topics within the IRO community, identifying practical solutions and helpful hints for smaller owners nationwide as well as across Michigan. By shedding light on the realities of IROs and their invaluable contributions, we can collectively strengthen the rental property management industry for a more prosperous future.

"The IRO Perspective Column is a thought leadership endeavor powered by NAA’s Independent Rental Owner (IRO) Committee, which advocates for all independent owners to the Board of Directors and Assembly of Delegates." 

Looking for a local MIchigan study? Here is the Detroit Future City Study provided in 2022