An Increasing Number of Millionaires Are Opting for Renting Instead of Buying—Here’s Why

While millionaires can afford to buy homes, many are choosing to rent instead, potentially reflecting a desire to have more flexibility.

Between 2019 and 2023, the number of households with renters who had incomes of $1 million or more increased from 4,500 to 13,700, a more than 200% increase, according to a RentCafe analysis. As of 2023, one in 11 millionaires is now renting their homes.

“For a lot of wealthy people today, renting is less about affordability and more about flexibility,” said Ravi Kantha, founder and principal of The Kantha Team at Serhant in New York. “They want the freedom to move, upgrade, or change neighborhoods without being tied down. They’d also rather keep their capital working in other investments than locked into one or more properties. For them, it’s about choice, not necessity.”

And this trend is playing out across the country. Millionaires are renting in coastal cities like New York, Los Angeles, and San Francisco as well as southern cities like Houston and Dallas.

What’s Driving Millionaires To Rent?

It seems that millionaires want what many people want: flexibility. Although this group of people may have room in their budget to purchase a home, in high-cost of living cities like New York, it might make more sense to rent.

“We’re working with more clients who could easily buy, even at the very top of the market, but are opting for rentals instead, ranging from $20,000 a month to more than $100,000,” Kantha said. “In Manhattan and Brooklyn, where transaction costs and carrying costs can be heavy, renting can actually be the smarter play depending on their goals.”

In Los Angeles, Tony Mariotti, chief executive officer of RubyHome Luxury Real Estate, has seen a similar increase in millionaire renters.

Mariotti believes that renting appeals to millionaires in particular because it better aligns with their lifestyle and allows them to avoid the downsides of homeownership, like dealing with maintenance.

“For wealthy clients, lifestyle trumps ownership. Renting gives you maximum flexibility—if your priorities change, you’re not stuck,” said Mariotti. “Luxury buildings are packed with amenities and always in prime locations, so you get convenience without any maintenance headaches.”

Mariotti also notes that millionaires may prefer renting because it allows them to avoid timing the housing market.

“If you want to move, you just wait for your lease to end—no waiting six months for your $5 million house to sell… And if the market tanks, it’s not your problem,” he said.

The Bottom Line

There’s been an uptick in the number of millionaires who are renting luxury residences rather than buying them.

According to real estate agents, this group of renters may opt out of homeownership because they don’t want to deal with certain homeownership responsibilities, like maintenance. They may prefer having more flexibility and want the ability to move when they want, while leaving their money tied up in investments beyond real estate.