Property Industry Disruption: How Technology is Changing Vacation Home Market.
Owning a vacation home at the seashores of Capetown and many other vacation spots around the world is many people’s dream but has only been a reality to the 1% elite club members. Most of the time vacation homes are only occupied one month in a year and the rest of the year the property is not occupied. Pacaso a Silicon Valley real estate start-up specialising in the vacation homes market is turning a dream into reality with its new property ownership model. Rather than selling a house to an individual Pacaso allows 8 people to own shares in a property.
How Pacaso Works
At the core Pacaso’s model is timesharing but the difference is rather than owning time with Pacaso you own the property via shares in the company.
Pacaso buys a property in the most sort after vacation homes markets like Capetown here in South Africa. The company then create an LLC (PTY) that will own the property and divide the ownership of the company into eight fractional shares.
Pacaso then list a fractional share of the property on its website for example at the time of writing this article vacation home in Malaga, Spain listed for $872 098 (R13 419 582) for 1/8 Ownership.
Pacaso finds and vets other co-owners of the company (property) and handles all the sales details. Each co-owner can own more than 1/8 of the company if they want. Pacaso charges 12% of the property’s purchase price and other monthly maintenance fees.
Selling Your Share
If you decide your Pacaso is no longer the right fit within the first twelve months you can only transfer to another Pacaso but after twelve months you can now list again you share and set your price and the average time in 2021 was 10 days on the market with an average of 10% gain.
Scheduling Of Stay
Each co-owner is entitled to at most forty-four days a year and scheduling of house use amongst co-owners is done via the app, at any given schedule one cannot use the property for thirteen consecutive days. Pacaso allows you to gift your allocation to friends and family.
Another Scenario is for current vacation homeowners who only use their home once a year, they can decide to list part of their property of Pacaso while still enjoying their vacation home. You can decide to sell one eight, a quarter or half of the property.
Real estate has been lagging on technology adoption and this will change the housing market and allow real estate agents to sell luxury properties to a wider market.
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