6 Things to Consider Before Buying a Second Home

Many people dream about owning a vacation home or a second home. That’s the easy part. What comes next is more challenging.

Start by considering these six aspects of second homes:

Location: How close do you want to be from your primary residence?
Cost: What is your income and comfort level for spending?
Space: What is your desired home type, size and configuration?
Household: How many people are you trying to accommodate?
Usage: How much time can you really spend at your second home?
Pets: Do you have a four-legged companion joining you?

It’s helpful, too, for second home buyers to understand the real estate market conditions in their dream location. Other financial factors include the cost of furnishings, taxes, insurance, utilities and general maintenance. The all-in cost of whole home ownership can sorely detract from what’s supposed to be a relaxing and pleasurable experience. These pressures prompt people longing for vacation homes to consider other options, including:

Short-term weekly, monthly or seasonal rentals: Home-sharing through rental platforms such as Airbnb and VRBO have been very popular. But these vacation home rentals can come at a steep price, especially during peak seasons, because property owners ask premium rents.

Renters may also be disappointed if the property doesn’t live up to the expectations set by listing photos or descriptions. The property’s condition and cleanliness may vary widely from home to home. And with concerns over health and hygiene, the high volume of people coming and going makes these kinds of rentals less appealing to some people.

Timeshares: These “right-to-use” purchases can work for buyers who have identified a vacation spot in a resort community they want to return to regularly. But the expense of buying into a hotel or condo timeshare can be daunting, annual fees can be high, and use restrictions can be a turnoff.

Another downside: It’s notoriously difficult to recoup your purchase costs. Timeshares don't appreciate like real property, and according to the respected Sherpa Report, a timeshare owner can lose as much as 30-50% of the value once the time comes to sell.

DIY co-ownership: This is where family members or friends own property together, often as a result of an inheritance. This arrangement can be a cost-effective way to share ownership of a property, but if not set up and managed correctly, it can lead to legal or personal disputes.

Fortunately, an updated version of the co-ownership model offers the cost and usage benefits without the pitfalls of the DIY approach: fully managed LLC co-ownership. LLC co-ownership is an innovative way to own a second home. With Pacaso's co-ownership model, buyers purchase an ownership interest in the home, from 1/8 to 1/2, as part of a small, vetted group of owners, and have access to their home for up to six weeks each year. On average, Pacaso owners stay in their second homes six or seven times each year for about a week at a time. Whether a buyer decides to buy one share or several, co-owners have true property ownership of a modern luxury home plus ongoing access throughout the year. There are flexible financing options available, and owners split monthly operating expenses (such as utilities, taxes and maintenance) proportionally. Owners pay a monthly fee of $99 per share for Pacaso's program management services, and they can sell at any time if their the other ownership interests in their home are sold.Pacaso also makes it easier to enjoy your second home by alleviating the typical ownership headaches. Some benefits include:

An innovative Smart Stay™ system that is easy to use, equitable for owners based on the number of shares owned, and reflective of real-time home availability.
Freedom from management hassles, care and upkeep of the property. It’s completely handled. Your home is cleaned and sanitized to our high standards, ready for you and your loved ones.
A seasoned and technologically advanced leadership team, which gives owners peace of mind and confidence in their purchase decision.
Pups welcome!

Buyers are looking for smarter ways to get the vacation home they want, without high risks and overhead. Pacaso's co-ownership model helps make second home ownership possible for more people.

Vacation home dreams? 6 realities for second home owners to consider

Start by considering these six aspects of second homes:

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