4 Intriguing Fractional Home Ownership Options

If you’re into second or vacation homes — and you are, because that’s why we’re here — then you’ve no doubt encountered the concept of fractional home ownership by now. The idea has gained ground in recent years as two things happened. One of them is an increase in supply — more companies have popped up offering new and different ways to invest in real estate this way. And then there is demand — since the work-from-home movement has really taken hold, more people want to spend greater stretches of time away from home base. The rationale is that they can work from anywhere, so why not?

What is Fractional Homeownership?

The concept is simple, although it works differently depending on who’s doing the selling. Rather than purchasing a vacation home yourself, you purchase a portion of it, either with other owners or a company. You then split the time in the home, split the costs of the home, and, if you choose to use some of the time to rent it out, you split the income.

One company we’ll cover offers homes in fractions between one-fourth to one-tenth, and the company does the legal stuff and manages the rentals if the owners choose to offer the home for rent. Another offers “sets” of extremely high-end luxury homes to a limited group of investor, and the company manages the homes as investment portfolios as well as providing concierge-level service to the owners when they spend time at the homes — no rentals allowed.

Isn’t This Just Basically a Time Share?

It’s not. Realtor Lawrence Mendive of Intown Dwellings said, “I wouldn’t touch a time-share with a 10-foot pole, but I’m all in on this.” In addition to being a top agent and broker in DFW for decades, Mendive also manages dozens of properties around town and knows of what he speaks.

With a time-share you get locked into all sorts of limitations — when you can go, how long you can go, how many people can go — and what you own is time in a property, not the actual property. Plus, it’s notoriously difficult to get out of. With fractional home ownership, you’re purchasing a home just like any other home purchase — you’re just sharing the purchase with others and agreeing to certain terms of use.

“I haven’t done it personally yet, but as an investment, I’m comfortable with it,” Mendive said. “I haven’t heard the bad part.”

Here are a few of the companies that are offering fractional vacation home ownership on the market now.

Pacaso

Pacaso is possibly the most well-known fractional home ownership company, founded by former Zillow CEO and co-founder Spencer Rascoff. Their business model sought to go beyond the scope of the timeshare and “empower people to own a share of a second home, from 1/8 to 1/2, and experience true real estate ownership.” The company purchases properties they think will be great vacation homes, and then sell shares of them. The individual owners then function like small businesses, with Pacaso managing the details.

The company experienced rapid growth and initial success, but has not been without controversy, from disgruntled neighbors to company layoffs amid a changing economy. Nevertheless, they have 56 vacation listings currently on their website and are actively recruiting agents for their training program.

Here’s an interesting example of one of their listings: it currently has two shares available of eight total, and both shares are listed by current owners. The shares for this four-bedroom, three-bath house in the Crown Point neighborhood of San Diego are listed at $467,000 and $479,000. From the listing:

“As a co-ownership marketplace, Pacaso makes it easy for owners to list their ownership and tap into our pipeline of buyers. Owners are empowered to sell at the time and price of their choosing, and we help them to market their share.”

So they actually help you sell when you’re ready.

Summer

Summer works differently from what many think of when they think of fractional home ownership because you’re essentially going into business with the company rather than other individual owners. Two Airbnb alums founded this startup in 2021. They purchase properties they think will be good for vacation rental income. As a buyer, you have the option for immediate purchase or gradual purchase.

With immediate purchase, you buy the home, and they furnish, decorate, and do any necessary upgrades to the property. They manage the rental, and you collect a percentage of the income. You select between 40, 60, and 90 days of your time in the house, plus you get access to all the other Summer-owned properties. Everything is the same with a gradual purchase, except you only pay a 20 percent deposit on the home, plus a subscription fee, which they credit toward your purchase if you decide to buy during a three-year period.

For example, this “Charming Cathedral Chalet,” in the Catskills of Hudson Valley, NY recently sold.

Equity Estates Fund

Another unique model is Equity Estates Fund, which is definitely in the luxury category. This model works as a series of fund offerings, each for a limited number of investors. The group of investors together own vacation properties around the world, which they, and they alone have access to. Equity Estates provides design, furnishings, and concierge-level services to owners when they travel to residences. The fund has a scheduled divestment of about 10 years, at which time, the funds are disbursed first to the owners until 100 percent of the initial investment is returned, and then 80 percent of the appreciation thereafter. Founded in 2006, Equity Estates Fund has a longer track record than most and boasts an average 62 percent growth rate.

Here are a few examples of their properties:

Residence Clubs

Another option is to buy into a private residence club There are a growing number of these in desirable destinations. Private club residences offer the same type of situation as some of the above offerings but think condo or resort setup. The residences are fully furnished and staffed, with concierge-level service, but you own real estate with a much lower cost and commitment that can be sold, inherited, etc.

Here are a couple of standout private residential clubs:

Club Ki’ama Bahamas

Billed as “a one-of-a-kind co-ownership opportunity that combines luxurious solar-powered, oceanfront homes with a fleet of solar-powered and crewed yachts, as well as electric day boats, a beach club, spa, and restaurant.” As a Club Ki’ama owner, you will enjoy five weeks or more of flexible and carefree land and sea adventures throughout the year. Ownership starts at $525,000.

Casali di Casole

Private Residence Club membership at Casali di Casole is the low-maintenance way to own a vacation home in Tuscany. Yes, please, where do I sign up!? The estate is magical – over 4,000 acres of olive trees and vineyard, walking distance to a medieval village, and easy drives to Florence and Montalcino. Ownership guarantees several summer and winter weeks in residence per year, plus unlimited access on a space-available and short-notice basis at no additional cost. represents an undivided deeded real estate purchase in a specific Tuscan farmhouse.

More Options

Wait, there’s more! If you don’t have the money to invest in fractional home ownership yet, but still want to try your hand at real estate investment – there are options for you! Several companies have made small share fractional ownership possible, as low as $10/share. Ten bucks doesn’t get you any vacation stays, but you can build up a portfolio slowly. Check out some options here.