Some of Manhattan's ultra-wealthy could easily afford to buy luxury property, but choose to rent for a variety of reasons.
Digging deeper into this elite group, Financial Times After speaking with multiple real estate brokers, rents revealed a range of $25,000 to $75,000 per month, although one townhouse in Soho was being rented to a tech guy for $100,000 per month, or $1.2 million per year.
The supply of such units surged after New York City was rezoninged to allow for more high-rise buildings under Mayor Michael Bloomberg, but the preference for renting over owning is more recent, the center said. FT report.
A big catalyst has been the exodus from New York to Florida since the pandemic began, with people spending most of their time working remotely in the tax-free state but needing a place to stay in Manhattan when they travel for important meetings or events.
A long-term stay in a five-star hotel is more expensive than renting a luxury apartment. What's more, real estate brokers FT Renting is less permanent than owning, and remote workers want to avoid scrutiny from New York tax authorities. And while many rentals are done through corporate accounts and higher rents are tax-deductible, corporations are also reluctant to own expensive assets. One broker even suggested that renting on Billionaire's Row was a good networking opportunity.
Brokers say most ultra-wealthy tenants are well behaved, but some can afford to behave badly and try to avoid the consequences. Here are some horror stories.
“They're very hard to catch because they're very wealthy and have the assets to fight for,” said Colin Bond, who heads the Fabricant Bond team at Compass. FT.
He gave the example of a tenant who worked in the finance industry who was paying $30,000 a month but was evicted: The owner later learned that the tenant had avoided court cases by refusing to pay rent in other cities, but in New York he was put on trial and had to pay rent.
But the headaches didn't end there.
“We went out there to assess the damage and found he had literally removed walls. It appears he had called in a contractor to rip everything out, bag it up and haul it away,” Bond said.
Meanwhile, Corcoran's agent, Julie Pham, FT A businesswoman paying $50,000 a month asked the owner to install a high-tech Toto toilet, but when she moved out the owner discovered she had stolen it.
Then there were these two crypto buddies.
Compass agent Brandon Trentham told one story. FT A “Bitcoin user” was paying $55,000 a month for a furnished townhouse, but the owner was storing his personal belongings in a locked cupboard, as required by the rental agreement.
But the tenants opened the boxes anyway, took out the items, and dumped them on the side of the road for collection. The owner managed to salvage some of the items, but the rest were sold on Facebook Marketplace.
“They were crying because they'd lost all of their children's memories and family photos,” Trentham recalled. “When we spoke to the tenants, they had no remorse. They were young hooligans with ridiculous amounts of money, and they said, 'We've asked you to take all your personal belongings. If you want to sue, go ahead.'
This story originally appeared on Fortune.com.
