Millionaires are increasingly renting homes, not owning

The number of millionaires opting to rent a home rather than buy one has soared — signaling a shift in how the wealthy think about investing in real estate. 

Between 2019 and 2023, the population of millionaire renters in the US more than tripled, reaching 13,692, according to RentCafe. 

While most in this deep-pocketed class still own — the tally of millionaire homeowners topped 143,000 last year – the surge in luxury leases suggests that liquidity and flexibility are trumping the pride of ownership.

The pandemic years coincided with the sharpest gains, especially in low-tax Southern metros such as Houston, Dallas, Miami and Atlanta. Large coastal cities, however, still dominate. 

New York counted 5,661 millionaire renters in 2023, up from 2,204 four years earlier. San Francisco ballooned from 321 to 1,411 in the same period.

“They’re choosing flexibility and liquidity over ownership,” Glen Stegemann, a broker with The Agency in Miramar Beach, Florida, told the New York Times.

“They don’t want to be bothered with the inconveniences of homeownership, which includes paying real estate taxes and insurance, especially in markets like Florida and California, where we’re seeing a lot of natural catastrophes.”

Douglas Elliman’s Keyan Sanai, who represents a $35,000-a-month Turtle Bay penthouse, said high-end tenants often rely on financial logic, not sentiment. 

“Typically speaking, wealthy people are either smart or have very smart advisors,” he told The Post.

“Why wouldn’t someone who has the disposable income, who can probably find some sort of home office loophole to write off at least a part of it, rent here for $30,000, keep a primary residence elsewhere and then have no liability?” he added. “For example, if the fridge broke, the building has to fix it. If the dishwasher leaks, call the super. It’s not on you.”

He said insurance has become prohibitive in disaster-prone states. 

“A year before those horrible wildfires happened, Warren Buffett’s company pulled insurance from that area because the wildfires were a real concern,” Sanai noted.

Returns also matter. 

“The market is, on average, returning — even the S&P Index — 8% over the last couple of years. Whereas in real estate, if you’re looking at Manhattan over the last 10 years, you’re either losing money if you’re selling right now or you’re not making money, you’re breaking even,” he said.

One of his clients, a CFO earning $4 million a year, chose to rent a $25,000-a-month apartment. 

“The living expense, which is, for most people, the biggest monthly or yearly expense — if you still have 93% of your income, that’s pretty damn good,” Sanai said.

Politics, he added, are another reason some wealthy New Yorkers are hesitating to buy. 

“If you buy something right now, at this moment, and a certain socialist gets elected mayor, it’s going to drop in value, at least temporarily,” he said of mayoral candidate Zohran Mamdani. “If [Mamdani] wins, then it’s like … everything just dropped 20%. So I think that even people who are in contract, if he wins, they back out.”

For some, timing matters more than tax strategy. 

Priyanka Shah, 39, a biotech venture-capital investor, has lived at 67 Wall St. since March 2023. Despite having plenty of savings to purchase, she prefers renting. 

“I actually have a lot of money saved down to buy, whether by down payment or even kind of putting up all cash — that is not an issue for me, but I’ve intentionally chosen to rent just because of the flexibility that it offers,” she said.

Her decision is tied to both her career and her personal life. 

“Right now I’m in a place where I am actively dating in New York. I’m looking for a partner. And I’m looking to settle down as well. And so I feel like I’ll be more open to buying once I figure out who that person is,” she said. “I feel there’s also just flexibility just in case job-wise, I come across a really great next opportunity for me and I choose to take it.”

She said her capital is working harder elsewhere. 

“I do have cash to buy a place … but right now, I am primarily invested in the market.”

Though she expects to purchase one day, she said renting her unit, which Corcoran agent, Kunal Khemlani, helped her find, fits her lifestyle: “I am really, really enjoying it. Like, not only do I love the unit at the location, but it’s very accessible. There’s so much history and culture and also just fun things to do socially in the area.”

But some families have even settled in their rentals. One millionaire family — composed of a financier and a socialite, who declined to be named for this story — stayed put in a posh Fifth Avenue building where they rented when the wife was pregnant 20 years ago. A two-bedroom now asks $25,000 a month there.

“We never left!” she said. “We couldn’t agree on an apartment and my husband doesn’t like to move, so we ended up staying. And we loved the view, location, and all the light since we are high up, which we couldn’t find anywhere else at the time.”

Scott, a finance professional, and his wife, a lawyer, moved with their child into a roughly $10,000-a-month Brooklyn rental and are selling their Rhode Island vacation home. 

“The main reason we’re looking to rent is just instability in the market as a whole,” he said. “The bank interest rates are pretty much close to all-time highs for our generation, and it feels like a waste of money — pumping into interest payments.”

He said even conservative savings can outperform property appreciation. 

“If I were to put my money into a high-yield savings account, it’s still generating close to 5% interest. I’m not guaranteed I will get that same rate of return for three to five years when buying a place when I know that the real estate market is so volatile right now.”

Low supply and fierce competition, he added, only complicate matters. 

“The rental market is actually way more like a buyer’s market, where multiple people come in for open houses. Someone puts an offer in and then it just keeps getting escalated and escalated until … the landlord decides on what price,” he said.

For the wealthy, the prestige of ownership is no longer the only measure of success. 

“More and more wealthy people are being advised or coming to the realization on their own that renting is just a lot less liability, and it’s a lot less of a tax burden if you’re renting in Manhattan,” Sanai said. 

Additional reporting by Jennifer Gould