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Written by: Bea Pablo
Over the past several decades, the market for luxury vacation homes has undergone a transformation. What was once a niche reserved for ultra-wealthy families has expanded into a broader segment of affluent buyers who want the comfort and prestige of a second home, but without the operational burden, underutilization, or concentrated financial risk that traditionally came with it.
Interest in high-end vacation homes surged in recent years as consumers sought more predictable, private ways to travel. The global pandemic accelerated that demand, but the underlying trend has persisted: buyers still want access to beautiful homes in the most coveted destinations. For multiple reasons, some buyers do not want to purchase multi-million dollar homes they will use only a handful of weeks per year. This shift created a new category of ownership models: fractional ownership, co-ownership platforms, and investment-backed residence funds–designed to offer lifestyle access without full ownership costs. These structures appeal to a growing demographic: Travelers who want flexibility and diversification, and families who want curated, hassle-free vacations.
Greg Salley, Managing Director of Equity Residences and a long-time real estate investor, in the recent opinion piece published by the Luxury Lifestyle Magazine, called fully owned second homes a “money drain until they are sold.”
At the center of the fractional ownership conversation is Pacaso, a company that popularized the idea of co-owning a single luxury home through an LLC structure. Pacaso focuses on limited access to one home, enabling buyers to purchase one-eight or more of a residence and share ongoing operating costs with other co-owners. It offers simplicity and a familiar real estate ownership framework, but the model ties buyers to a single home’s performance and limits how and when it can be used.
Meanwhile, Equity Residences, is a real estate investment fund that acquires a portfolio of luxury homes across global destinations. Rather than purchasing a fraction of a single home, investors hold an interest in a professionally managed fund. Through its currently open offerings, the Equity Platinum Fund 2 is currently open to new investors and is acquiring exclusive luxury vacation residences in Hawaii, California, the Caribbean, and other highly coveted destinations. The fund is targeting a $50 million raise from accredited investors to acquire up to 16 multi-million-dollar luxury homes in top-tier vacation markets.
These residences are selected for prime positioning, including ski-in ski-out resort homes, beachfront locations, and residences located in bustling European destinations. Many provide access to private club amenities, golf course privileges, and resort-style services. In parallel, the Equity Euro Fund is raising €33 million to acquire a portfolio of 12 luxury vacation homes across Europe’s most desirable destinations, with an average projected investment of approximately €2.48 million per home. These funds allow investors to participate in diversified portfolios of professionally managed luxury residences, offering both lifestyle access and long-term investment potential rather than exposure to a single home.
As demand rises and the market diversifies, many prospective second-home buyers and investors are looking for clarity about the range of models available. Pacaso and Equity Residences represent two distinct approaches. One is centered on co-ownership of a single residence, the other is structured as a real estate investment fund with a diversified portfolio. While each serves different needs, examining them side by side helps investors understand how each aligns with their lifestyle preferences, financial expectations, and long-term objectives.
What is Pacaso?
Pacaso is a luxury real estate co-ownership platform that enables buyers to purchase shares in a single high-end vacation home. Instead of buying an entire multi-million dollar second home, buyers purchase a portion, typically starting at one-eighth of the home, that corresponds to both ownership and annual usage rights in that specific home. The model targets individuals who want the benefits of a dedicated second home without the full financial burden, ongoing maintenance, or year-round responsibilities typically associated with luxury vacation home ownership.
For a deeper understanding of how the model works, we also have a complete guide to Pacaso ownership that outlines the structure, benefits, and considerations for investors exploring this type of second-home strategy.
How Pacaso Works?
Pacaso acquires luxury homes, places it into a dedicated LLC, and sells membership interests to up to eight co-owners (⅛ share). Buyers hold a share of the LLC rather than a deed to the homes, giving them defined rights and responsibilities without full ownership.
Pacaso identifies a luxury home in a desirable vacation destination, purchases it, and prepares it for co-ownership. Homes are fully furnished, inspected, and brought under professional management before fractional shares are offered. This turnkey setup appeals to buyers seeking ready-to-use luxury vacation homes. Ownership of each home is held within a separate limited liability company (LLC), through which co-owners hold membership interests. Co-owners purchase membership interests in that LLC, which:
- Defines governance and decision-making rules
- Protects co-owners from cross-property liability
- Centralizes ownership under a legally structured entity
A proprietary scheduling system allocates nights among owners, balancing peak-season demand with a rotating priority system. Usage is proportional to the ownership share, ensuring equitable access throughout the year.
Pacaso Cost Structure
Pacaso’s financial model consists of two main categories: upfront home share price and ongoing management fees. Buyers pay an upfront amount tied to the residence’s market value, destination, and design tier. Industry reviews published in 2025 report that a one-eighth share on the Pacaso platform typically ranges from $149,000 to $2,800,000, reflecting the premium pricing of luxury homes in markets such as Napa Valley, Malibu, Aspen, and South Florida. Full ownership of all eight shares represents a multimillion-dollar valuation for each home.
Ongoing Management Fees and Resale Features
In addition to the initial share purchase, owners are charged a recurring management fee of $99 per month, per share, on top of pro-rated costs for upkeep such as maintenance, utilities, insurance, and taxes. Beyond this fixed fee, owners are responsible for pro-rated costs related to home maintenance, utilities, insurance, repairs, and local taxes. These operating fees ensure the home remains fully managed, well-maintained, and turn-key for all co-owners, though actual amounts vary depending on location, size, and seasonal usage.
Variable costs tied to personal occupancy, such as cleaning, utility usage during stays, and concierge services are generally included in shared operating fees or billed proportionally, depending on the residence agreement.
Resale and liquidity considerations are another key element of the cost equation. Fractional shares can often be resold after a minimum holding period (typically 12 months of ownership before owners can list their share for sale), but the market for a single home’s fractional shares may be limited. Unlike traditional real estate or diversified funds, appreciation or depreciation is tied exclusively to the single home, meaning returns are inherently linked to its location and market dynamics.
Owners typically list shares on internal or approved resale platforms, and any profit or loss reflects both the original purchase price and the home’s current valuation. By factoring in the upfront share price, recurring management and operating fees, and variable per-stay costs, prospective owners can estimate the effective cost per night, helping high-net-worth buyers compare fractional co-ownership with full ownership or fund-based luxury vacation models.
Who Should Consider Pacaso?
Pacaso appeals to high-net-worth individuals and families seeking a luxury vacation home with reduced financial and operational responsibilities. Pacaso is ideal for those seeking a personalized, repeatable luxury vacation experience in a single destination, rather than a diversified investment portfolio.
While Pacaso focuses on co-owning a single luxury home, some investors are looking for a broader approach that combines vacation access with long-term investment potential. Rather than being tied to one home, this alternative provides exposure to a diverse collection of high-end vacation homes across multiple destinations, offering both turnkey travel experiences and the opportunity to participate in portfolio growth over time. This model is offered by Equity Residences, through Equity Platinum Fund 2 and Euro Fund, offering investors curated access to multiple luxury properties while benefiting from professional management and long-term appreciation potential.
How Equity Residences Works
Equity Residences operates by raising capital for real estate funds, investing in carefully selected luxury vacation homes. Investors benefit from both home appreciation and rental income while enjoying rent-free stays, combining investment potential with lifestyle perks. The first fund, the Equity Villa Fund, has appreciated roughly 150% since launch, with some assets currently being liquidated to capitalize on favorable market conditions. Investor usage is structured based on fund participation, with each investor entitled to a number of nights across the portfolio proportional to their capital contribution. Priority booking systems ensure access to high-demand periods, and homes are maintained and fully managed year-round.
This strong portfolio continues to grow as our third fund, the Equity Platinum Fund 2, is raising $50 million to acquire 16 luxury vacation properties. Investors have the option of paying no annual fees and receiving dividends from rental income in exchange for reduced personal use of the homes. The recently launched Equity Euro Fund continues this model, offering access to a new portfolio of high-end homes across multiple destinations.
Financially, investors benefit from both rental income generated by the properties and long-term appreciation of the fund’s assets. The combination of usage rights, cash flow, and portfolio growth creates a hybrid of lifestyle and investment value that differentiates this fund investment model from traditional fractional ownership.
Cost Structure: Pacaso VS Equity Residences
While Pacaso’s model focuses on co-owning a single luxury home, Equity Residences operates as a real estate investment fund that acquires and manages a diversified portfolio of high-end vacation homes. Investors contribute capital to the fund rather than purchasing a fractional share of one home, and in return, they receive proportional usage rights across multiple curated residences. Unlike Pacaso, Equity Residences also offers an option with zero annual fees.
When homes are not being used by investors, those unused nights may be rented to third-party guests, generating rental income for the fund. This structure allows investors to enjoy rent-free vacations across the portfolio while also participating in potential long-term appreciation and shared income at fund maturity.
Investors benefit from diversification across multiple luxury homes and destinations, combined with professional management that balances both lifestyle access and financial performance. This makes the fund-based approach particularly appealing to those seeking a combination of vacation flexibility, reduced operational responsibilities, and potential long-term investment returns.
Equity Residences attracts savvy investors looking for both lifestyle benefits and long-term financial growth. Those who value access to multiple luxury properties, prefer professional management, and are comfortable with a multi-year investment horizon will find the fund-based model compelling. The diversified portfolio and fund structure provide broader exposure, reduce concentration risk, and allow investors to enjoy vacation access without competing with renters for prime dates, as Equity Residences generates rental income by making homes available to guests during periods when investor families are not using them. The residences are professionally managed and offered through carefully controlled rental programs, typically to high-net-worth travelers. That income helps offset operating expenses and annual fees, and when rental revenue exceeds costs, it may be distributed back to investors as cash dividends.
Cost Per Night Comparison
According to a 2025 cost analysis published by FinanceBuzz, the real economics of Pacaso ownership become clearer when the numbers are broken down over actual usage. In one example reviewed by the publication, a one-eighth share required an upfront investment of roughly $260,000, paired with ongoing monthly expenses that added up to more than $55,000 annually. That share typically comes with about 42 nights per year. Even when an owner fully uses every allocated night, it was calculated that the annual carrying costs alone translated to well over $1,300 per night. The analysis highlights a key dynamic of the model: because many expenses are fixed regardless of the usage, the per night cost rises quickly if an owner travels less than their full allocation.
It also examined Pacaso’s partial-sale program for existing second-home owners. In these cases, the home is sold into a newly created LLC, with the original owner able to retain up to half of the ownership while Pacaso sells the remaining interests to other buyers and manages the ongoing operations.Once you own a share, you also take on ongoing operating costs — maintenance, taxes, utilities and upkeep that you share among co-owners. These recurring expenses are spread proportionally among owners, reducing individual burden compared with sole ownership. Pacaso’s scheduling system can limit access during peak seasons, shifting some owners to off-peak weeks.
Industry data reported in trade publications shows that annual maintenance fees at private residence clubs tend to exceed those of conventional second homes. Surveys place the average annual maintenance cost for these clubs at roughly $19,000, which, when broken down over a six-week stay, equates to approximately $16,800, or about $400 per night for that usage period. These figures underscore how quickly carrying costs can add up in shared-ownership models that rely on high service levels and club-style amenities.
| Model | Key Assumptions | Estimated Cost Per Night | What It Reflects | |
| Pacaso | Share‑price range: US $149,000–$2,800,000 + Monthly operating & management fees (incl. maintenance, utilities, taxes, Co‑owner split) + scheduling constraints when demand peaks ) | Using a modest share + moderate usage: ~$500–$1,800 / night | Cost per night heavily depends on how many nights you use. Higher usage dilutes fixed costs; low usage inflates it. Scheduling constraints (peak seasons) may reduce convenience and value per night. | |
| Equity Residences | Effective cost-per-night calculated after operating costs and rental income offsets; based on fund-approved usage and projected 10-year vacation value. Includes Priority Visit weeks, Space Available Visits, and any elected dividends from rental income | ~$114–$585 / night | Fund-level diversification, professional management, and rental-income offsets keep per-night costs predictable. Investors gain access to multiple homes, with projected investment returns of 10–19.6% IRR² and potential 1.3–1.5x return of capital² over the fund lifecycle. No single-residence risk or heavy maintenance burden. |
Equity Residences Usage Translation and Effective Nightly Value
Equity Residences provides access to a diversified portfolio of luxury vacation homes across multiple destinations. Investors in the Equity Platinum Fund 2 enjoy rent-free stays with an estimated effective cost per night of $114–$585, depending on usage and fee allocation. Over a ten-year period, a typical investor’s vacation value can range from $360,000 – $440,000. Fund-level management and rental income offsets help reduce costs and mitigate risk, while potential long-term appreciation adds financial upside.
Beyond per‑stay savings, Equity Residences offers asset diversification across multiple homes and professional management covering upkeep and administration, removing the owner burden associated with traditional second‑home ownership.
Many investors have noted the lifestyle upgrade this model provides. One long-time partner shared that before joining Equity Residences, their family regularly spent more than $10,000 per week renting vacation homes. After joining the fund, they were able to enjoy dozens of luxury trips over the years, effectively turning their vacation spending into an investment while staying in homes valued at millions of dollars and benefiting from both curated experiences and professional management.
The combination of cost-efficient stay rates, diversified asset base, and fund-level oversight positions Equity Residences as a hybrid between a luxury travel club and a real estate investment vehicle, offering both lifestyle perks and long-term financial growth potential.
Ownership Value and ROI Potential
Pacaso ties appreciation to a single home, so financial upside is limited and mostly secondary to lifestyle use. Heavy personal use can improve cost efficiency, but returns depend on that home’s market and seasonal demand. Equity Residences offers diversified exposure across multiple luxury homes in various markets, combining potential fund appreciation with rental income. This structure enhances upside potential and provides curated vacation access, making it suitable for long-term investors seeking both lifestyle benefits and financial growth.
Pacaso suits those seeking a single turnkey vacation home, while Equity Residences appeals to investors looking for diversified travel access and long-term financial growth. Choosing depends on whether lifestyle or investment value is the priority.
If you’re interested in exploring Equity Residences as a diversified luxury vacation home investment, contact us at info@equityresidences.com.
