United States
February 22, 2023
PayProp Insights US

The rise of the millionaire renter

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Millionaire renters could be coming to a city near you.

According to data from RentCafe, the number of renters earning over $150,000 a year has reached 2.6 million after surging by 82% between 2015 and 2020.

Even more rapid growth can be seen in the record number of renter households with incomes exceeding $1 million – there are now 3,381 millionaires choosing to live in rentals, compared to 1,068 in 2015.

Wealthy renters tend to live along the coasts, but major cities in and bordering the Sun Belt also saw significant growth in the same period.

At the same time, RentCafe attributes the 11.2% decline in lower-income renters earning less than $50,000 to the rise in multigenerational households as a result of high cost of living.

There is a chance that if more millionaires enter or stay in the rental market, they may deprive those who are most in need of housing. Right now, there is insufficient data to draw any firm conclusions.

Sky-high home prices have historically pushed low-income households out of homeownership. Meanwhile, affordability is less likely to be an obstacle for high-income households. So why aren’t they buying?

It could be due to popular Millennial lifestyle trends, given that the generation made up the majority (28%) of millionaire renters. Renting gives Millennials the freedom and flexibility they want in order to travel or relocate to pursue career opportunities.

No matter their reason for renting, this emerging type of tenant could be beneficial to your own income – top earners are more likely to be able to afford premium rents, tolerate higher rent increases, and pay reliably.

More tenant lifestyle headlines

Renting to self-employed tenants – what property managers need to know – PayProp

Single women homebuyers & renters outnumber single men – PayProp

More people are moving to Miami – Axios

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