Wealth Blog

Finance Blogs » Wealth Blog » Why the rich are renting

Why the rich are renting

By Judy Martel · Bankrate.com
Tuesday, July 3, 2012
Posted: 7 pm ET

Sales of luxury homes are rebounding, but a growing number of the ultra-rich are still renting, even if they can afford to buy. Real estate brokers say it's another indication that the housing market has changed in ways they're still trying to grasp.

Some of the reasons for renting among the rich are typical to the broader market: Potential buyers who purchased a home during the boom have been rendered gun-shy by the housing bust. And with mortgage rates predicted to remain near historic lows for the next year, there's no sense of urgency to buy immediately, giving buyers time to be choosy while home prices settle.

But there are additional reasons for renting that are specific to the luxury market. High-end rental properties have become more plentiful, as investors in luxury properties choose to rent them out while waiting for prices to rebound. In New York City, agents are reporting that the rich who own property elsewhere are opting for the low-maintenance lifestyle of renting in the city.

CNBC reports that mansions in tony areas like Miami, Beverly Hills and Manhattan are renting for more than $100,000 a month. Of course, for that price, you get square-footage, primo views of the city skyline or the yacht docks and plenty of amenities like tennis courts and even private discos.

Since the housing bust, have you become more committed to renting or do you still hope to buy a home?

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
July 19, 2012 at 9:56 pm

When you're renting it's much easier to move/relocate without having to deal with renting your home, dealing with property management companies or ruining your credit. If you want to move to another country to try a new life, you simply wait until the end of your lease/rental agreement, pack up and go. Home ownership is worthless now unless you find a deal at 50% of current market value and you really plan on staying in the home for the long haul.
Otherwise, besides tax benefits, there is no sense in home ownership anymore. Besides, you don't own the home until it's PAID OFF anyway. Home ownership is an illusion unless you paid cash for it or paid it off in 5-10 years.

July 18, 2012 at 9:45 am

Have you seen the White Elephants on Million Dollar Listing: Los Angeles? If I were rich and could afford to cherry pick what the big wide world has to offer, I wouldn't stay in one place. And luxury hotels now offer huge square footage for long term use.

July 18, 2012 at 6:29 am