Luxury vacation home sharing platform Pacaso is trying to appeal to the masses as it grows its business during an expensive and competitive phase of the real estate market.
The company launched multi-million-dollar co-ownership homes in 2020 and is currently launching thousands of homes on the market with stock prices as low as $200,000. Previously, the stock price was close to $500,000 or even higher.
Pacasso lists shares in the vacation home, usually one-eighth but sometimes larger, and then facilitates the purchase, including financing if necessary. It also provides and manages homes, allocating owners’ time in their homes through the app. There are fees to purchase and manage.
“You can afford a lot more when you buy an eighth or a quarter of a home versus buying an entire home, and we live in an environment now where housing affordability is an issue,” Co-Founder Austin Austin Allison said. Founder and CEO of Pacasso. “House prices are high, interest rates are high, so it’s really hard for people to afford their dream home.”
Unlike resort timeshares, where consumers purchase time rather than property, Pacasaw owners benefit from the value of their home, which typically increases over time.
An example of the new low-priced vacation rental listings in Pacasso.
CNBC
“Our resale owners benefit from approximately 10% appreciation above what they previously paid for the underlying home. As a result, Pacasso’s stock generally remains in line with the underlying property,” Allison said.
Wealthy buyers are spending hundreds of thousands of dollars on ski homes in Colorado and beach houses in Hawaii. Pacasso charges high fees – 10% to 15% of the front-end home value – in connection with gathering groups of owners, facilitating transactions and establishing co-ownership structures.
Pacaso’s revenue exceeded $1 billion last year, the company said.
However, the company faced backlash from the community, who likened it to Airbnb Use steroids. There’s even a website dedicated to cracking down on the company, called “Stop Pacasso Now.”
Residents of Sonoma, Calif., passed an ordinance banning Pacasso from operating in the city. In St. Helena, Calif., where timeshares are banned, Pacasso reached a settlement that protects its four existing properties but prevents the company from expanding into other properties.
“We operate in more than 40 markets across the country, and there are only a handful of markets that we misunderstand,” Allison said. “Our approach is to work with policymakers to educate them about the facts and benefits. We believe this approach will prevail over time. It has not yet worked in Sonoma, where a handful of communities have passed the boycott This model of edict. ”
Pacasso has also added a new set of services to help primary homebuyers access the home-sharing model.About one in five primary home buyers last year bought with a friend or relative, according to the real estate website Zillo.
“People are now using co-ownership as a way to afford homes they wouldn’t otherwise be able to afford. So, it’s not just happening in the vacation home space,” Allison said.
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