Pacaso, a real estate start-up launched in October, says its business model modernizes an old practice, making better use of the tight housing inventory. Launched by two former Zillow executives, the company purchases luxury single-family vacation homes and sells them to a group of buyers through a fractional ownership model, explains CNBC. One co-founder says most second homes sit vacant for 11 out of the 12 months, but with co-ownership, these homes are split between several buyers, resulting in better use of the vacation spot. It’s different from a timeshare and acts more like a group of friends purchasing a home together.
The company also offers integrated financing, interior design, property management and proprietary scheduling technology services.
“Imagine if you and a small group of friends decided that you wanted to own a home together,” Allison explained. “That’s what Pacaso does, except for we handle all the details — everything from bill pay and maintenance to design — so that you can enjoy your second home and not have to worry about the headaches.”
Up to eight buyers can purchase shares of a single property, Allison previously told the Napa Valley Register, but most of the company’s homes are split between five and six buyers. Pacaso owners can sell their share after 12 months of homeownership.
“The owners have complete control,” he said, adding, “Pacaso is effectively a property manager once you purchase your one-eighth or one-quarter interest in the home.”
Vacation home prices surged during the Covid pandemic, reaching an average cost of $468,000 in seasonal towns, according to a report from real estate brokerage Redfin. The demand for these second homes was primarily being driven by affluent professionals who were able to work remotely, Redfin CEO Glenn Kelman told CNBC in October 2020.