Alternatives to Buying a Vacation Home in 2024

Owning a vacation home is a dream for many people — a beautiful home away from home where you, your family and your friends can relax, reconnect and enjoy living like a local in your favorite vacation destination. Yet full second home ownership isn’t always the right fit for everyone. Owning a vacation home can be expensive, require a lot of effort to maintain and make you feel obligated to spend every vacation there to get your money’s worth. Here are some popular alternatives to buying a vacation home, including the pros and cons of each option.

Luxury co-owned vacation homes

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1. Renting a vacation home

When you rent a vacation home, you get some of the benefits of your own vacation home, without the investment or responsibility of actually owning it. Here are a few pros and cons.

Benefits of renting a vacation home

When you rent a vacation home, you enjoy a lot of flexibility. You can choose to stay in a different home, in a different destination, every time you travel. You can choose a smaller home for traveling with your immediate family, then a bigger home for a multi-generational trip or a trip with a large group of friends. Stay at a beachfront home for a warm-weather getaway, then spend a winter weekend on the slopes in your favorite ski resort town. When you rent a vacation home, you won’t have the large investment of a down payment and monthly mortgage payments, nor will you have a long-term commitment.

Drawbacks of renting a vacation home

When you rent a vacation home, you won’t build equity as you might with second home ownership. You also can’t make any changes to the home to suit your needs — what you see is what you get. Finally, you may have to negotiate rental restrictions and book far in advance to find a rental that suits your needs.

2. Timeshares

With a timeshare, you purchase rights to use a vacation property for a pre-set number of stays per year. Some timeshares are for use of a single property, while others may give you access to a portfolio of properties. Some offer a set number of nights per year, whereas others operate on a points system, which you can apply toward available stays.

Benefits of timeshares

As a timeshare owner, you enjoy cost-sharing benefits — per-night stays can often be cheaper than hotel bookings. And, since most timeshares are in a hotel or resort setting, you’ll enjoy access to on-site amenities and perks. Many people appreciate the predictability of their vacation costs as timeshare owners (although fees can vary year to year).

Drawbacks of vacation clubs and timeshares

Just because the pricing is more predictable with a timeshare doesn’t mean it’s always affordable. Some of these programs have high annual fees and expensive maintenance costs that may increase each year. Another downside is that it may be hard to find availability during peak seasons in popular destinations. Finally, timeshares often depreciate in value over time, making it hard to sell your shares when you decide you no longer want to participate.

3. Vacation clubs

As the name implies, vacation clubs are membership-based programs. In exchange for a one-time initiation fee and the cost of an annual membership, you get access to hotels, vacation homes, and, in some cases, travel experiences all over the world. You’ll find vacation clubs associated with major hotel brands, as well as luxury vacation clubs for the most discerning travelers.

Benefits of vacation clubs

While the specific perks vary from one club to the next, generally vacation club members enjoy access to a wide range of accommodations around the world, some of which are inaccessible to the general public. Nightly rates are discounted, and a host of amenities are included. Compared to other travel options, members often find bookings to be flexible. Membership also usually comes with perks such as concierge services, discounted rates on other types of travel and loyalty rewards.

Drawbacks of vacation clubs

The biggest drawback to being part of a vacation club is that membership can be expensive. Some also require long-term commitments, which make it difficult to cancel or modify your membership. Like many types of travel, members may find it difficult to book in-demand destinations during peak seasons.

4. Fractional ownership

With fractional ownership, a group of owners share the upfront purchase price and ongoing costs of a vacation home and they come to an agreement about equitable use of the home. Sometimes the owners know each other, as friends or family members. Other times, like the Pacaso model, you may buy into a fractional ownership using a limited liability company (LLC) with individuals you don’t know.

Advantages of fractional ownership

The biggest benefit of fractional ownership is the cost-sharing. Instead of shouldering the entire cost of buying and owning a second home, multiple owners split everything: the purchase price and the cost of maintenance and management. Because multiple parties pool their money, owners may be able to access a higher-end property than they’d be able to afford on their own. When you become an owner of a Pacaso, for example, you’ll enjoy a hassle-free, fully managed experience of a turnkey luxury home.

Drawbacks of fractional ownership

When you co-own a property, you have to equitably share time in the home with your fellow owners, so you may not be able to stay in the home every time you’d like. There’s also the potential of conflict or disagreements with your co-owners. Finally, you won’t have the full ownership benefits you’d enjoy as a single owner.

Find the right option for you

If full vacation home ownership isn’t right for you, there are many other options. You may want the flexibility of simply booking a rental home whenever wanderlust strikes. Or, if you want exclusive perks and access to multiple properties around the world, a vacation club or timeshare might be the right fit. Finally, a co-ownership opportunity might make the most sense, giving you access to a luxury home at a fraction of the full purchase price.

Another option: Co-ownership with Pacaso

If co-ownership of a second home is the best fit for your vacation goals, budget and lifestyle, consider Pacaso. Our unique co-ownership model allows up to eight individuals to share ownership of a luxury vacation property, set up as a multi-member LLC. Pacaso takes care of the day-to-day details, from cleaning and home management to managing billing and maintaining the LLC. Plus, our smart scheduling system makes booking stays easy and equitable for every owner. Fully furnished and expertly designed Pacaso homes are available in incredible vacation destinations across the country, as well as in Mexico and Europe.

Alternatives to buying a vacation home in 2024