Pacaso is a Silicon Valley-born real estate startup that sells shares of luxury vacation homes–a model that has drawn both admiration and outrage since its founding in 2020.  Pacaso’s rise gained notoriety after becoming a “unicorn” in record time, with a valuation of over $1 billion, within five months of launching. Such an impressive rise to prominence cannot be overlooked in the second home community, so we decided to take a deeper look at the model that has attracted so much attention in the last few years.

 Pacaso acquires single-family residences in residential communities not zoned for commercial use and then forms a limited liability company (LLC) for each to sell a piece of ownership to multiple buyers. This, essentially, creates a new form of fractional ownership: Pacaso fractional ownership. Pacaso’s approach has drawn some controversy in residential communities like Sonoma and Park City, where residents complained about multiple owners sharing houses and creating noise and high non-resident turnover. Unlike traditional fractional ownership homes that are located in specially-zoned resorts where this model is permitted, Pacaso’s model centers on converting existing single-family homes in residential neighborhoods into co-owned properties. This difference, albeit small for some, is key to Pacaso’s business model and a root cause for some of their problems with local residents who push back on short-term use by Pacaso home owners.

The goal of Pacaso is to provide ownership of a luxury vacation home at a lower price by assembling four to eight partners per home. While Pacaso promotes its second home co-ownership model as an innovative way to share the costs and responsibilities that are associated with owning luxury  real estate, residents in affected communities argue that it effectively turns residential homes into quasi-commercial assets—blurring the line between private homeownership and timeshares. Unlike an investment fund model, you may not recoup your initial investment (let alone receive any investment gains) and are locked into a single location. 

Since inception, Pacaso has been polarizing communities, journalists, and high net worth individuals who are their ultimate clients. A look at this ReddIt thread summarizes the discourse around Pacaso. The user “ Equivalent-Kale-1768” calls Pacaso a “timeshare” while other commenters provide a more balanced perspective on the business model, with some owners saying that they love the experience while some users like “STOPacaso_in_Sonoma” express open hostility towards the company and the business model. 

Pacaso’s Mission

The Pacaso business model centers around selling memberships in limited liability companies, each of which owns a house. This, on paper, makes second home ownership a lot more attractive for high-net-worth individuals interested in paying lower prices for a residence they won’t use for more than 4-6 weeks a year while offering deeded ownership via the LLC membership.

Having worked at Zillow for years, both Austin Allison and Spencer Rascoff, the co-founders of Pacaso, knew that many Zillow users desire a luxury vacation home but can’t justify the cost. Hence, the main idea behind Pacaso real estate is making these properties available to a much larger market by selling fractions.

Co-ownership has long been an alternative path toward luxury vacation home ownership for years now, yet Pacaso’s structures the investment differently enough to warrant a second look.

Right now, you’re probably wondering, “How does Pacaso work?” The idea is surprisingly simple yet strategically structured. Pacaso offers an alternative path to fractional home ownership, helping buyers enjoy a luxury second home without bearing the full cost alone. 

The Pacaso business model is, in essence, one in which ownership is a three-step process that helps second-home buyers get the property they want without having to shoulder the full cost themselves.

The process begins when prospective buyers browse through Pacaso’s catalog of single-family luxury homes that are positioned across the most desired destinations across the US and a growing number of them abroad. After selecting a home and the number of shares a buyer would like to own in the property, the Pacaso team takes the reins of the operation by creating an LLC for each property and vetting potential co-owners. Pacaso does succeed in streamlining the buying process by taking care of all the paperwork. Upon closing, the co-owners will collectively hold 100% ownership of the property, with Pacaso retaining none of the shares, acting from then on as a property manager instead. Pacasohandles scheduling, maintenance, and other operational details. This structure simplifies what would otherwise be a complex real estate transaction, making fractional ownership of vacation homes more attainable for busy professionals and high-net-worth individuals seeking lifestyle investments. 

Pacaso’s revenue comes primarily from the fees generated for facilitating the initial transaction and also includes any preparation expenses, like furnishing and interior decor, incurred to arrive at the final sale price of the property. This bundle of add-ons results in a markup on the market value of the properties they offer and also on the upgrades, furnishings, taxes, and closing costs.

According to Pacaso’s leadership, their mission is to“democratize access to second home ownership so that it can be something that is not just a luxury available to the 1%, but hopefully it can be available to many tens of millions of other people around the world.”

Yet this raises an important question: Is Pacaso fractional ownership truly making luxury more attainable to millions of people? Let’s take a deeper look.

Expert Perspective

According to Steve Dering, the Equity Residences Director and pioneer in shared luxury ownership space,  “Most of [luxury fractional buyers] can well afford to buy a high-end vacation home, but it doesn’t make sense for them to do so since they only want to spend a limited number of weeks in it a year.”

Pacaso Benefits After Purchasing a Home

The biggest upfront benefit of Pacaso is acquiring a luxury vacation home while paying only 1/8th of the total cost. But they also offer property management services that assist with maintaining the LLC, property tax payments, and advising during share resales.

Their app is also available, which can streamline the scheduling process for all the co-owners in the property, minimizing contact between them. In a sense, it works like an Airbnb but with only one destination. This is similar to more traditional fractionals but without the benefit of a centralized staff that does most of the maintenance and scheduling work for the co-owners, even though Pacaso charges maintenance fees just like other fractional real estate investments. 

While the ease of access makes the user experience good overall, being limited to one location can hurt the value of your Pacaso investment when there are options out there that allow you to travel to many different locations while growing your equity.

Scheduling Your Stay

All scheduling is done through the Pacaso proprietary app, which is part of their digital ownership platform. Some flexibility to accommodate spontaneous trips is also provided, but that is dependent on the other members in your LLC and their schedules. Their system also factors in peak seasons making sure that holidays are evenly distributed between all Pacaso co-owners. Every co-owner has access to 2 peak weeks, 2 off – peak weeks, and, in the mountain homes, to 2 weeks during a shoulder season.

The LLC Co-Ownership Model

Since Pacaso uses an LLC co-ownership model, everyone participating in the Pacaso home ownership is an LLC member. This structure means that all major decisions related to the property including maintenance, repairs, scheduling, upgrades, and rule-setting – must be approved collectively by the members. While this arrangement allows multiple buyers to access a luxury property at a lower cost, it also requires compromise, coordination, and a willingness to align with the preferences and schedules of other households.

Defining LLC

What is an LLC? The standard LLC definition is a limited liability company. In essence, it’s a business structure where personal liability is minimized. LLCs are popular because they offer business regulation benefits similar to corporations but are easier and cheaper to form and to operate.

Like in any LLC, each individual owner is insulated from liability. Pacaso extends its homeowners’ liability protection, flexible management structure, and certain tax advantages that appeal to those exploring fractional home ownership or luxury property investments

What Does It Mean to Have Ownership Interest In A Property?

A property owner, in the true sense of the word, is someone who has both equity in the house as well as deeded interest. If an individual purchases real estate in the traditional manner, that’s sole ownership.

Someone with a timeshare merely owns the right to use the property at certain times rather than the house itself. Second home co-ownership with Pacaso does come with ownership interest both in equity and on the deed, but other fractional home ownership models offer you greater freedom by providing access to multiple residences within the same development or through the Elite Alliance platform and allowing you use your interest in the homes to travel to other destinations by exchanging with owners in other locations. It is important to note that community residents and journalists often refer to Pacaso as “timeshare”and use this term interchangeably with “fractional” terms. These business models are distinctly different, as we covered in our previous articles. 

Many prospective buyers ask, “Is Pacaso a good investment?” The answer depends on one’s financial goals. While Pacaso offers the opportunity to co-own luxury real estate at a fraction of the cost, it is best viewed as a lifestyle and curated experiences over traditional financial returns. As the Roxbury Review notes, Pacaso’s model is designed to provide luxury access and convenience rather than generate high financial yields, making it more of a lifestyle choice than a traditional investment.

learn more about fractional ownership

Common Misconceptions About The Co-Ownership Model

Shared ownership generates skepticism and concern, like whether or not the other shareholders would cause problems or damage the property, and what the structure would be like when it comes to property taxes.

In the overwhelming majority of fractional home ownership ventures, it’s in the best interest of all shareholders to keep the property well-maintained and coordinate their schedules ahead of time. This is true of all fractional home ownership, not just Pacaso. Traditional fractional home ownership, though, differs from Pacaso for having a centralized staff, front desk, and concierge that run the property on behalf of the owners.

It’s also worth noting that Pacaso handles property taxes for co-owners. Each owner pays their share pro rata as part of their monthly ownership costs, simplifying the administrative side of ownership. 

Expert Perspective

According to the fractional industry pioneer Steve Dering, “People often mix up fractional ownership with timeshares, where consumers buy a certain amount of time in a vacation home but don’t actually own the property. With fractional ownership, you own real estate that can be sold, placed in a trust, gifted, or inherited.”

Can You Sell Your Share Of The Property?

Each Pacaso co-owner in an LLC has independent control over their share of ownership in the property, allowing them to sell at any time after 12 months of ownership or for any price they deem fair. Finding a buyer might not prove as easy, however. At the time of this writing, the resale of an LLC is an unproven concept as the first resales are starting to hit the market. However, the Pacaso website states that “On average, Pacaso listings resell in 12 days for a 12% gain.”

Pacaso is also prepared to advise you on what a good price would be and provide comparative market analysis data from your local market to help you make an informed decision.

You should also keep in mind that your ownership is locked for the first 12 months, meaning you’ll have to wait one year from the time the sale was finalized before putting your share on the open market. On top of that, other owners will have a right of first refusal when it comes to who you’re selling your share to.

This is a situation where every buyer decides for themselves how much of a risk they are willing to take when they enter into a contract with multiple co-owners who have their own financial interests and personal situations which may affect everyone around them.

Pacaso shares are now listed on MLS as a “co-ownership opportunity”, like this La Jolla, California home is. Initially marketed by Compass for $7.9M as a whole listing, it was sold for $7.1M. Now individual ⅛  shares are listed for $1,184,000 each. Time will tell how much individual owners can receive in appreciation at resale, but the price of the home after Pacaso’s fractionalization comes up to $9,472,000 after totaling up all the shares, a 28.6% increase over the market value. Time will tell how individual shares in the home will perform at resale. But Pacaso put mechanisms in place to gain visibility on MLS. 

The main difference between Pacaso and fractionals is that the property is treated as an LLC with Pacaso acting as a property manager, and ownership of the home is essentially the same as buying shares, with a minimum investment of 1/8th of the property.

In 2024, Pacaso opened up thousands of new listings nationwide, expanded price points (some starting around $200,000 for a share), and destinations. Pacaso also introduced its first à la carte services to support individuals pursuing DIY co-ownership.These offerings include legal templates for LLC formation and operating agreements, designed to help buyers independently establish shared ownership of a vacation or primary home. Pacaso plans to expand these services further, providing comprehensive co-ownership support. 

In 2025, Pacaso also announced new partnerships with The Agency, a global luxury brokerage, and revealed plans for 30-year co-ownership mortgage, designed to allow multiple co-borrowers to finance a single property, an industry first that further distinguishes its model.  

While Pacaso continues to innovate its ownership and financing structure, community perception has been more divided. Discussions on Reddit suggest that some investors remain cautious, citing uncertainties around liquidity, resale, and long-term appreciation. This highlights an important distinction: Pacaso’s model offers easier entry into luxury real estate, but also introduces new questions about exit flexibility and investment stability. Traditional real estate and private residence clubs tend to manage more predictability.  

With Pacaso’s combination of real ownership, smaller groups of owners, and property management assistance make Pacaso sound good on paper, but is it really a game-changer?

Let’s compare it with other popular options for luxury vacation homes.

Private Residence Clubs

Private residence clubs are high–end fractional home ownership. You get access to a full staff that takes care of maintenance, repairs, and even general housekeeping as long as you keep paying your annual fees. Some private residence clubs operate under famous hotel brands such as Four Seasons, Ritz Carlton, and Rosewood. They are in the prestigious destinations and resorts such as Deer Valley, Utah, Papagayo, Costa Rica, and Jackson Hole, Wyoming.

Private residence clubs are also deeded real estate, meaning you’ll be eligible for various tax benefits that you’d get with a second home. In this sense, PRCs and Pacaso come with a few of the same perks, although the value of the former might outweigh the latter if you crave variety with your vacation time.

Finally, you only pay a purchase price proportional to your personal use. You don’t have to worry about any ownership responsibilities since the club takes care of everything. You can trade your vacation time with owners at other clubs around the world through Elite Alliance Exchange or through a fractional network.

Pacaso fees and a markup on the property’s market value are actually how the company turns a profit. Your co-owner group will be paying for property management in the long run, as with any other high-end vacation home. 

For example, a Pacaso home in Kamuela, Hawaii,was listed at $4,716,000 for four co-owners ($1,179,000 per 25% share) versus the estimated market value of $3,398,000. This indicates a markup of approximately $1,318,000 or 32.5%, which includes Pacaso’s service fee, furnishings, taxes, and closing costs. This represents a significant increase from the 12% markup Pacaso advertises. 

Pacaso stopped listing monthly maintenance costs for their homes on the website. This house in Aspen has been on the website since at least 2022. Three years ago the costs were published right on the page:  “home expenses” for the house ran at $2,197 a month per owner. This came up to $26,364 per year in maintenance costs per owner for 44 nights a year, provided the owners don’t finance their purchase and pay all cash for their shares. If they vacation for all the 44 nights, the cost per night comes up to $600.

A Reddit user “IrishTarheel” asks the question: “I feel like the biggest question is the transparency of the money directed to Pacaso for each sale. The company may buy a property for $3M and then sell 8 shares that add to $4.5M. Sure, they do a great job of professional decor, and have to pay for marketing, etc., but this wouldn’t explain $1.5M on a single property that gets generated in a period of months. However, fractional ownership is attractive, so if the shares sell at the higher valuations, I can’t blame them. However, I haven’t found a great answer yet of WHY they feel this markup is appropriate.” 

By comparison, an industry survey shows that annual maintenance fees at private residence clubs are substantially higher than typical single-family second home costs. An industry data reported in trade coverage puts average annual maintenance from private residence clubs near $19,000 (which would equal roughly $16,800 for 6 weeks of use, or about $400 per night for that period) 

Pacaso offers co-owners the chance to cancel the management agreement with them (if all the co-owners agree to it in writing, that is), but that still leaves you with the need for additional property management and no mediator to turn to if a problem arises between any of the parties involved.

Potential Rewards

Referral Equity Program

Pacaso has an incentive program that rewards referrals with equity commissions for closed sales, and the program applies to any Pacaso listing. The commission is 500 RSU (restricted stock units) for every customer you refer who ends up buying an ownership stake.

As of this writing, Pacaso offers homes in over 40 markets across the U.S., Mexico, and Europe, reinforcing its reputation as a global leader in co-ownership and luxury real estate investment opportunities. And they continue to expand.

Pacaso’s Regulation A+ Raise

While Pacaso’s recent $72.5 million Regulation A+ raise highlights strong interest in the company itself, it’s important to separate that from the value of its co-ownership model. The fundraising reflects investor confidence in Pacaso as a business, not necessarily in the individual co-ownership experience. 

Importantly, Reg A+ is simply a capital-raising mechanism that allows companies to tap into public equity crowdfunding, not a product or share in a property. Pacaso specifically used this structure to widen access to its early backers, including everyday retail investors. This broad investor base helps fuel Pacaso’s growth, but those Reg A+ investors are investing in the company, not necessarily buying into the co-ownership product itself. With that distinction in mind, we can now consider who actually finds value in Pacaso’s fractional luxury homes.

Who Will Find Value in Pacaso?

While Pacaso makes luxury vacation homeownership more accessible for affluent families, there are important considerations for prospective co-owners. Shares are illiquid, meaning resale can take time, and the market for selling a portion of home is limited. Upfront costs for Pacaso ownership can be substantial relative to the limited number of weeks each year that a co-owner can use the home. Co-owners share responsibility for decisions about the home, including maintenance, scheduling, and any updates. These decisions are made through the LLC, which means no single owner has full control and coordination among all members is required.

These factors make Pacaso appealing for access to luxury homes, but they also carry operational and financial complexities that buyers should weigh carefully.

If you want a second home that you can live in for half or even the majority of the year, then Pacaso likely isn’t a fit for you. At the end of the day, co-ownership is all about sharing a property with other shareholders so you can all get joy out of the home and share the expenses of purchasing and running such a home.

In that sense, buying into Pacaso falls into a niche between all the major industry models: It’s not as convenient as just renting an Airbnb, but it is above the price tag of the majority of other luxury vacation home ownership out there. It is touted as akin to buying shares, but you do not generate money on your investment through rentals as with other fractional ownership business models.

Many of the Pacaso houses are very nice, the locations are usually stunning, and if you don’t mind being locked into just one location, then investing in Pacaso could be the best option for you. But suppose you want to get even more value for your money without dealing with a group of co-owners or actually getting a return on your investment while visiting truly luxurious destinations. In that case, Equity Residences funds are by far the best option.

Pacaso and the Controversy 

When Austin Allison set out to solve what he called the “empty second homes problem” in California’s most desirable vacation towns, he followed a familiar Silicon Valley formula: move fast, disrupt, and worry about the rules later. But its rise has come with turbulence. After layoffs and regulatory clashes, Pacaso is rebuilding its image and seeking a path to an IPO. Founder Austin Allison insists the company is evolving: “Co-ownership is a meaningful real estate category that’s growing quickly, and we’re the global leader.”

Still, not everyone agrees. 

Allison says Pacaso has learned from its early missteps. Legal disputes with cities such as St. Helena and Newport Beach are being settled, and the company now frames itself as a partner to local governments. Still, memories of lawsuits and protest signs declaring “Pacaso Not Welcome” linger in the communities it disrupted.

The company’s approach has blurred the lines between ownership and short-term rental, igniting fierce debates in communities from Sonoma to Palm Springs. 

A Fractured Welcome in Sonoma

After a protracted battle with residents of the Old Winery Court neighborhood in Sonoma, CA, Pacaso delisted its property from its website. This move came as a result of the residence being listed as a “vacation home” by Pacaso, leading to months of campaigning against the company by residents.

The residents quickly organized around a simple idea: To get Pacaso out of their neighborhood. They went so far as to create a website to warn other communities in vacation areas around the country. And they’re not alone. Pacaso does its best to define itself as something different, but many cities see little difference between their business model and a timeshare, which puts Pacaso squarely on the no-go list for residents of many upscale resort communities. Traditional fractionals make sure their developments are in areas zoned for short-term use and, therefore, fractional owners get no pushback from their neighbors.

While there is nothing illegal in the way Pacaso conducts its business and it might be seen as nothing more than the growing pains of a new industry (similar to what happened with Uber), it would be wise to consider the long-term implications of vacationing in an area where the residents are hotly contesting your right to be there, especially if the local government agrees with them. With Pacaso, your neighbors are other homeowners who might end up fighting the Pacaso business model.

Residents Have Voiced Frustrations in Park City 

In Park City, Utah, local voices have been vocal about fractional ownership. A 2022 guest editorial in The Park Record called it a “destructive incursion” into neighborhoods, raising concerns about affordability, community cohesion, and preserving areas built for families and full-time residents. Residents worry that these short-term, part-time owners can change the rhythm of daily life, from crowded streets to fluctuating school populations, and that neighborhood traditions and connections may erode over time. Residents also point out that such ownership structures often favor wealthier outsiders, pricing out locals and creating tension between neighbors.

For many, it’s not just about homes, it’s about preserving the sense of belonging and identity that makes Park City feel like home.

This distinction has raised concerns among some residents and local officials who worry about the impact on community character and housing availability. As one Park City homeowner, Craig Kipp, cautioned during a local planning commission meeting: “Once these are turned into these fractional ownerships, it’s gonna be impossible to go backwards. The house will never become a single-family residence because you can’t get eight or sixteen or four people to agree to sell it back to a single owner and leave the residence.” 

While Pacaso presents itself as a modern, flexible way to own a luxury home, many locals see it as just a fancy timeshare. Expensive, impersonal, and completely detached from the sense of community that makes a neighborhood feel like home. Residents worry about constant turnover, visitors who don’t really belong, and the impact on the character of streets built for families and full-time neighbors. On top of that, legal experts point out that fractional ownership can clash with zoning rules, since it’s often treated like a commercial operation rather than a regular residence.

For towns like Park City, the challenge is clear: how do you allow innovation in ownership without turning your neighborhoods into a revolving door?

Banned from Indian Wells 

Pacaso has experienced rapid growth since its founding, expanding to multiple U.S. states. Despite its expansion, Pacaso has faced significant local resistance in several communities. Residents argue that fractionalizing single-family homes in neighborhoods not zoned for short-term or shared vacation use disrupts community dynamics, increases traffic, and places additional strain on local infrastructure, similar to challenges seen with short-term rentals. 

According to a study from Desert Sun, for instance, residents successfully lobbied to ban new Pacaso and other co-owned homes after expressing concerns about neighborhood character, privacy, property values, and the loss of a sense of community. 

Similar debates have occurred in other resort communities. In Palm Springs, the city’s regulatory approach to co-owned luxury homes has evolved rapidly in response to growing community concern. On June 11, 2025, the City Council unanimously adopted amendments to strengthen the existing co-owned managed-housing ordinance, which was first enacted in July 2024 to oversee companies such as Pacaso. The updated ordinance indefinitely extends the citywide cap of 30 co-owned housing units originally set to expire in 2027 and restricts ownership density by allowing no more than two co-owned properties per neighborhood, spaced at least 500 feet apart.

The ordinance also mirrors short-term rental policies by limiting occupancy to reduce noise and traffic, while tightening enforcement to ensure accountability. Permits for co-owned properties can not be automatically suspended or revoked after three administrative violations, aligning penalties with the city’s vacation rental regime.  Supporters believe that updated rules help protect neighborhood character and give homeowners clearer guidelines. Residents, however, argue that fractional ownership still drives up prices and changes the feel of local communities. Palm Springs’ stricter oversight has become one of the clearest examples of how cities are trying to balance property rights with community preservation. 

Homeowner Concerns and Governance Issues 

While Pacaso’s model for fractional vacation home ownership has made luxury second homes more accessible, some owners in the online community have raised concerns about how much control they truly have once they buy in. Recent online discussions suggest that the company’s centralized management structure can limit decision-making power for co-owners, a key consideration for anyone evaluating whether Pacaso is a good investment. 

In a Reddit thread, owners of Pacaso homes in Malibu shared frustrations about the company’s handling of insurance claims after several properties were destroyed in California wildfires. One owner wrote that Pacaso “has not given us definitive answers regarding insurance payouts” and expressed disappointment that “owners have no say whatsoever.” Several users also pointed out that because Pacaso retains control over the LLC when there is outstanding debt on the property, co-owners may have limited influence on major financial or operational decisions. 

One owner noted that the homes were “vastly underinsured” and that the insurance proceeds “will only cover a rebuild,” adding that Pacaso “still has not started any work on this or even turned in paperwork to the city.” These public conversations, shared on Reddit, underscore the importance of understanding how Pacaso property management and financing structures work before buying shares. Like other fractional ownership luxury homes, the model provides convenience, but it also concentrates control with the management company. For potential investors exploring Pacaso real estate or considering whether to invest in Pacaso, it’s worth carefully reviewing the operating agreement, insurance coverage terms, and exit options before purchasing a share. 

Knowing all this, is Pacaso a good vacation home investment? Is it a good luxury property investment? Well, the Pacaso co-ownership model is a good option if you want to have tangible ownership and control over the property. However, it is no bargain. Even for 1/8th of the cost, the houses are expensive and come with hefty monthly maintenance fees and obvious Pacaso price markups.

At the time of this writing, luxury vacation properties are still experiencing a surge in values. Some believe that Pacaso overpays for the homes and that cost is often passed down to the buyers in the LLC. All in all, while certainly not as costly as some other luxury options, Pacaso only makes sense for top earners willing to spend money on a vacation home.

Compared to the Pacaso model, Equity Residences is an investment fund. Our goal is to pool investor’s money to buy homes with cash, create appreciation from Day 1 and use rental income to offset operating costs. Our investors enjoy the entire portfolio of homes during the investment period. At the end of the investment period (approximately 10 years) we sell the homes, return the investment amount and distribute appreciation proceeds.

Since we started the company in 2011, local zoning regulations addressing short–term vacation rentals have evolved significantly. To avoid conflicts with local residents over the use of the funds’ homes by investors and renters, we buy residences in resorts and in areas zoned for short-term use.

Our team is composed of experts from the real estate, hospitality, and finance industries with a proven track record. In terms of ROI, our first fund, the Equity Villa Fund with over 100 investors, has seen asset appreciation of 150% at the time of writing.

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.

Compare Pacaso and Equity Residences 

Expert Perspective

According to Steve Dering,  “Limited partners in Equity Residences funds have a more predictable return on investment … investors can choose from diverse locations.”

Equity Residences creates private equity funds that carefully evaluates and then invests in luxury vacation real estate. Our investors share in home appreciation and benefit from the rental of our homes. Rent-free enjoyment of very valuable vacations is the icing on the investment cake.

Equity Villa Fund, the first fund launched by Equity Residences, has appreciated 150% in value at the time of this writing. We are currently liquidating the homes in the fund and returning investor capital.  Some Equity Villa investors opted for monetary dividends in lieu of valuable vacations to better fit their investment goals. 

The second fund, the Equity Platinum Fund, raised $57 million and acquired a diverse portfolio of 23 luxury residences across Hawaii, California, Florida, New York, Italy, Costa Rica, the Caribbean, and Greece. The fund was fully subscribed and closed to new investors in 2022. 

The newest fund, the Equity Euro Fund, marks the company’s expansion to Europe, targeting luxury vacation homes valued between €1.5 million and €3.5 million. It focuses on established destinations such as the south of France, the Italian Lakes, Spain’s coastal regions, and select Alpine markets, areas chosen for their enduring tourism appeal, limited supply of premium real estate, and strong long-term fundamentals. The fund operates on a 10-12-year lifecycle, providing investors with usage rights, participation in appreciation and defined exit window. 

Equity Residences acquires all homes outright, operates without leverage, and uses rental income to reduce annual investor costs, a structure that distinguishes it within the luxury real estate investment sector. 

As the global demand for luxury vacation homes ownership continues to evolve, Equity Residences positions itself at the intersection of luxury travel and alternative investment. Its funds offer accredited investors access to an appreciating portfolio of real estate assets while promoting a model of shared ownership grounded in long-term value creation rather than short-term speculation. 

1.  What is Pacaso and how does the model work? 

Pacaso is a Silicon Valley-born real estate startup that offers co-ownership of luxury vacation homes by forming an LLC for each property and selling shares (often 1/8th). Owners get a deeded ownership, scheduling access through Pacaso’s app, and professional property management. 

2.   Is investing in a Pacaso home a good investment? 

It depends on what “good” means to you. If your goal is lifestyle, access to a premium home in a top destination at a lower cost, Pacaso might fit.  But if you are looking purely for financial return, you will want to dig into numbers: markup, ongoing fees, usage-limits, resale market, etc. The model leans more towards a luxury lifestyle choice than pure real-estate investment. 

3. How much does a Pacaso share costs and what are the ongoing fees?

Prices vary widely depending on the destination, size of share, and home. For example, some shares now start around $200,000 for certain listings. Beyond the purchase price you will pay monthly operating costs (maintenance, utilities, taxes), and you will pay Pacaso’s service and acquisition markup built into your share cost. 

4. How is Pacaso different from a timeshare or other fractional ownership luxury homes? 

Unlike a traditional timeshare, where you buy the right to use a property for a set timeframe, Pacaso offers real ownership (Via an LLC share) or the property itself. That said, unlike owning the full home yourself, you share usage and coordinate with co-owners. So it’s somewhere between full ownership and time-use product. 

5. What are the resale prospects of owning a Pacaso share? 

After a 12-month ownership period, Pacaso allows co-owners to list their shares for resale through its own marketplace. Pacaso assists with pricing guidance, marketing, and coordination, while existing co-owners typically have the right of first refusal. According to Pacaso, resale shares have shown an average annual appreciation of around 10%, compared to approximately 4.9% for traditional luxury homes. 

6. What does Pacaso handles, and what do I still have to manage? 

Pacaso handles setting up the LLC, managing the home, taking care of scheduling via the app, bill payment, and many of the logistics. You will still need to plan your stays, coordinate with co-owners, pay your pro-rata share of operating costs, and abide by the scheduling rules. 

7.  Can I rent out my Pacaso home when I’m not using it? 

No. Pacaso ownership is designed for personal usage by you and your guests, not for rental income generation. If you are looking for a model where you own and rent for profit, you will likely want to compare with other fractional or investment focused properties. 

8. How does Pacaso compare to Equity Residences? 

Both Pacaso and Equity Residences give you access to luxury homes in top destinations, but the structure and purpose are different. Pacaso focuses on personal use through co-ownership of a single property. Equity Residences, on the other hand, operates investment funds that own multiple luxury residences worldwide. Investors enjoy both vacation use and potential appreciation across a diverse real estate portfolio. 

9. Which model is better for long-term investment potential? 

Pacaso’s model is designed for lifestyle access, it’s more like owning a share in a second home. Equity Residences is structured as a real estate investment fund, where investors can benefit from a diverse portfolio, rental income, and eventual profit when the fund’s homes are sold. If you are seeking a balance of luxury travel and potential financial return, the fund model may be more aligned with your goals.  

10. Can Equity Residences owners use their homes like Pacaso co-owners do? 

Yes, but with more variety. Equity Residences investors have exclusive access to a portfolio of professionally managed luxury homes across beach, mountain, and city destinations. Rather than being tied to one luxury vacation home, investors can stay in different homes each year, ranging from Tuscany to Hawaii, through a flexible reservation system that prioritizes investor usage.