Silicon Valley's new disruption: Sharing your second home
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A one-eighth share in Pacaso's Grove property is available to buy for $683,000. Photo: Pacaso.
Pacaso, a California-based startup, is setting out to disrupt the vacation home market through co-ownership.
How it works: Owners go in with others (normally strangers) to buy a luxury holiday home through an LLC. A one-eighth share gets you sole access to the home for 44 days a year, but a larger share means more days per year and priority access to special dates like holidays.
- Pacaso manages administrative tasks like property upkeep and bill payments, and owners reserve their stays through an app.
Yes, but: While it may sound like a time share, Pacaso CEO Austin Allison says it's not. "With this you're not buying time in a home," he said. "You're actually buying real estate with a small group of people."
What they're saying: Derick Ball, 67, lives in Los Angeles and works as a doctor. He and his wife bought a one-eighth share of a property in Sonoma county.
- "I can't afford this size home – all eight eighths of it," he said. "But I can afford this one [share] and it has already paid back tenfold. We look forward to every trip… there's so much more value than the cost."
By the numbers: Pacaso commissioned a study from RCLCO, a real estate consulting firm, that found shares in its homes appreciate by an average of 9.7% when sold.
- "The average resale value of a timeshare is roughly 50% less than what [a buyer] paid, and that's if you can get out," Allison said. "With Pacaso… the value of the resale behaves just like the value of the underlying whole home."
Friction point: While the company manages properties in luxury destinations across the US, it has also faced pushback from local communities.
- Residents in Sonoma County have lobbied for tighter restrictions on co-ownership, saying it has the "potential to ruin the sense of community" in the region.
- Allison said a handful of Pacaso properties faced some early resistance from community members who confused it with short-term rental companies like Airbnb.
- "They assumed that it would be this revolving door of people," he said. "That's not the case. Pacaso owners are owners of the home – they have significant skin in the game."
To see more on Pacaso, check out this video on our Instagram.