Second homes for those who can afford them oftentimes sit vacant much of the year, acting as vacation homes, but rarely getting full-time use. The trend has been to turn them into vacation rentals, yet neighbors are pushing back with new zoning rules, finding the constant turnover of residents disruptive to a preferred, quieter neighborhood life.
Owning a second home can be risky for those who have the desire, but are not quite able to do so for financial reasons.
New to the Bend housing market is a firm specializing in high-end, luxury homes where the purchase price is divided among the buyers. It provides a way for a family to own a second home, but not have to sublease it as a vacation rental. And it spreads the cost of owning, furnishing and maintaining a second home, thus making it more affordable.
Pacaso is a San Francisco-based start-up that focuses on shared purchases of second homes. It was launched by former Zillow executive Austin Allison — tech entrepreneur and now CEO of Pacaso — and Spencer Rascoff, founder of Hotwire. Pacaso launched in October 2020 and is now valued at more than $1 billion, according to the Wall Street Journal. It operates in 30 U.S. markets and recently expanded to Spain.
Pacaso pairs buyers so they can purchase as little as an eighth or up to half the value of a home with other families. In exchange for a one-time, 12% service fee, the company takes care of maintenance, furnishing and logistics, while owners get their share of the home’s appreciation or depreciation and can book stays using a scheduling app.
It’s first listing in Central Oregon is in Sunriver, announced this week.
“While second homes in amazing four-season destinations, such as Central Oregon, often sit vacant most of the year, Pacaso brings families together to fully utilize the homes instead,” said Allison in a press release.
“The net effect is more inventory and the opportunity for buyers to uplevel their focus toward luxury properties and away from lower price points.”
“Our leadership brings a lot of real estate experience to the table which is why we are able to grow so fast, so quickly,” said Ellen Haberle, director of government and community relations.
There has been a surge in second-home buying, according to Haberle, thanks to the companies making remote working permanent due to the pandemic.
“As of November, second home demand was up 83% compared to pre-pandemic levels. There is a sea change in the second home buyer demands,” she said.
How it works
“We search for homes that are luxury, turnkey and two to four times the median value of homes in the area,” Haberle said. (The current average 1/8 ownership stake in a Pacaso-managed home is $915,000).
“We form a property-specific LLC that holds the title to each home and work with local Realtors to bring together interested buyers. Between two to eight families can own a share of a home. Once they close, they own and fully control 100 % of the home. Our role is the property manager.”
Pacaso is in charge of home maintenance, bill-paying coordination, scheduling occupancy times and other property management basics. (The company name is based on the modern artist Pablo Picasso, who used cubism to bring together divergent pieces to make the whole).
Allying neighborhood concerns
A company agent reaches out to the neighborhood to inform them of the purchase and to help smooth over any concerns, such as parking, trash or large events at the home.
“We act like a (homeowner association) with policies,” Haberle said.
The company partners with local Realtors who share a percentage of the purchase and can obtain stock values in Pacaso.
“We are very sensitive to the affordable housing issues, but our focus is that upper tier home,” Haberle said. “We are not a developer or home flipper. Buyers have to stay in the home at least a year.”
For more details, see the firm’s website at www.pacaso.com.