Not everyone can afford to own a house solely for the purpose of vacationing, although that soon might change thanks to a new platform founded by two former executives from the online real-estate marketplace, Zillow. Their latest endeavor, Pacaso, is the latest in vacation home ownership – and they’re taking a unique approach to make it both simpler and more affordable for everyday people to buy into.
Pacaso is a company that will offer you the opportunity to purchase a fraction of the ownership of a vacation home with up to seven other investors, which results in the cost for one person to buy into a vacation home through Pacaso is oftentimes drastically lower than if they were to either outright purchase or mortgage a vacation home themselves through a typical real estate agency.
Pacaso allows you to choose between owning an eighth or a quarter of the vacation home that you choose, also allowing financing up to 70% of the home’s purchase price with mortgage rates under 5% for most of their listings, according to Pacaso’s website. They also incorporate the latest and simplest forms of technology through their Pacaso Owner app, which allows co-owners to reserve the times during the year in which they would like to stay at the home, with the company saying that co-owners can expect to be able to visit about 6-7 times per year. All of Pacaso’s houses are also pre-furnished and themed around the design of the house, which many people might prefer over having to design the house and furniture themselves.
I went onto Pacaso’s website myself to see if it was actually a more financially feasible option for vacation home ownership, and I was surprised [and also slightly impressed] with what I saw. I was immediately given an option to search where I wanted to look for houses, and for the purpose of research, I looked in three distinct destinations across the country – California, Colorado, and Florida.
Firstly, let’s look at what Pacaso has to offer in the Golden State of California. I was able to find dozens of results for Pacaso homes in the state, and found a home called the Bacana located in Palm Springs, which is located just about two hours from Los Angeles and just about fourty minutes away from Indio, the site of the annual Coachella Valley Music and Arts Festival, or simply Coachella as many know it. The home was pre-furnished as promised, had a sizable swimming pool and artificial yard, an outdoor entertaining area for parties, five bedrooms and bathrooms – all on 2,000 square feet of space. The same house last sold in 2021 for exactly $2 million, but Pacaso was offering 1/8 ownership for just $200,000 – meaning that combined all eight shares offered by Pacaso would equal out to around $1.6 million, a $400 thousand decrease in price.
Next, I looked in the Aspen area of Colorado – notorious for its breathtaking scenery and mountain ranges and relatively small local population of just over six thousand as of 2023. Located in Aspen, I was able to come across 100 East Dean Street – a newly renovated core condo with just over 1,500 square feet, 4 bedrooms, and 3 bathrooms. This house was a bit different than the others that I found on Pacaso, as this one was on their list of houses that were being considered to become Pacaso properties. Despite this, they were still able to provide a lot of details and an estimated share price of around $1.1 million for 1/8 ownership. The ability to request that a property be made available through Pacaso is one that is a main focus for the company as they intend on expanding into more markets in the near future.
Lastly, I looked in Florida – the Sunshine State, and a massive tourist destination during the winter months. And there were plenty of offerings that Pacaso had listed in Florida, and Vista Park in Fort Lauderdale caught my eye. This home, which is just shy of 3,500 square feet had four bedrooms and bathrooms, a swimming pool and private backyard, and a backyard seating area with a roof over it to protect from the frequent midday rain showers that Florida is well known for. This house was listed by Pacaso at just $455,000 for 1/8 stake of ownership – while the house last sold on the market for $3.3 million in 2021. And the best part about this house was the location, primarily its proximity to many things in the area. For starters, the house was just a short walk away from Lauderdale Beach, and is in close proximity to both the Boca Raton and Miami metropolitan areas.
The offerings provided by Pacaso were certainly quite a surprise, and Pacaso is very transparent about their customer experience. They often host free webinars with real testimonials from a current Pacaso homeowner, and list a few examples on their website – while they could be considered biased towards promoting themselves as a quality service, there isn’t much objection from co-owners of Pacaso homes. Mainly, criticisms have come from people in communities like the Napa Valley, where they alleged that Pacaso was intentionally trying to get around local laws which restricted timeshare properties and companies in various ways. Despite the criticism from locals in the Napa region, Pacaso still maintains numerous properties in the area – many of which are located in the City of Napa.
In summation, while the properties are extremely nice and well taken care of, some people do criticize the occasional markups on share prices by Pacaso on select properties – although these markups can easily be linked to causes such as high demand in a concentrated area. However, in comparison to a traditional timeshare program, Pacaso shares can be seen as a good investment as they can gain value over time – while timeshares traditionally lose value over time. The company is currently still private, valued at over $1.5 billion, and continues to receive funding from various investors who see the company having a bright and optimistic future based on their continued investment into Pacaso.
