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Two companies offer to buy a share of a property, from an eighth to a half, to be able to enjoy a luxury space between 44 and 176 days each year
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The houses, normally chalets, are for now on the coast of Alicante, Marbella and Ibiza
Spacious lounges, Balinese beds in the garden, a infinity pool, a terrace overlooking the port in a city on the Mediterranean coast. Walls with windows, a bathtub, a gym, a clear office… All the comforts of a million-euro house. Places where a middle-class citizen, and even an upper-middle class citizen, could only afford to spend a vacation in his dreams. Until now. Because Luxury co-ownership has arrived.
Those interested in this new type of purchase will be able to enjoy a villa for at least six weeks a year, at points along the coast of Alicante, Marbella or Ibiza for the purchase price of an apartment in a gentrified beach area. Of course, they must be willing to share it for the rest of the months with seven other known or unknown people, that is, to enter into a co-ownership.
The idea of this type of buying and selling was brought to Spain Pacasoan American unicorn start-up, by the end of 2021. In a few weeks, pomegranate, a Spanish company, will replicate this business model. These companies offer to buy a share of a property, from an eighth to a half, to be able to enjoy a luxury space between 44 and 176 days each year.
Although co-ownership is not a new practice, Pacaso and Dalima raise a series of “rules, regulations, rights and obligations that they respect each other so that everything works perfectly” and conflicts do not arise between the buyers. “The practice of co-ownership is something that several friends can do if we buy a house and organize ourselves. What we saw was a way to make it more automated, to use technology for it and that there were a series of rules that would allow that group of friends, after this, to continue being friends,” he says. Ignatius Alonsocorporate relations in Europe of Pacaso.
Co-ownership is not timeshare, the way of sharing vacation homes that has been so frequented for decades in Spain. It is a different concept for several reasons, explains Question Cabinet, one of the founding partners of Dalima. If at any given time one of the owners cannot use the house during the weeks that correspond to him, he can give those days in his chalet to a friend or rent the house during those dates.
This procedure is managed from the Dalima mobile app. “Timeshares used to be apartments in hotel complexes with a vacation rental license. Dalima manages the vacation rental when it is not taken advantage of by the owner through its application and places an ad on the platforms where vacation rentals are searched,” type Airbnb or Booking, says Gabiteka.
The benefit that the owner receives from the rental of the days that correspond to him does not receive it in money, but in experiences, such as breakfast orders, requesting that they leave the fridge filled with the shopping list that he has indicated, reservations at a restaurant or massages, among other luxury services. “Due to tax issues, our law firm has recommended that there be no money income.” Likewise, the benefit can also be used for maintenance costs that may arise from the enjoyment of the villa.
And, as it is possible that the owner gets tired of always going on vacation to the same house, he has the freedom to sell his part and look for something better or make a profit after spending some time enjoying the villa. To avoid speculation, both companies impose a minimum commitment of one year as ‘co-owners’ of the home before preparing to sell their part.
Once this period has elapsed, they can advertise their participation in a real estate agency, although “sometimes people do not understand the model and it can cost them a lot to sell it,” says Alonso. The second option is to sell it directly to them, if “his brother or his friend wants it, it is transferable at a price that the owner decides.” The last way is to offer it through the Dalima and Pacaso platforms.
The latter has “a very powerful secondary market for the resale of shares.” In the US, at the end of the year, some 40 owners sold their shares. “We sold it after 10 days, with a profit of 10% on the market price and they did it to buy a share in the Pacaso world, because they wanted a bigger house or in another destination”.
“No or voluntary interaction”
If the owners are unknown, the interaction between them is “null or at least voluntary” so that they feel that “this is their home for six weeks and that there is no one else,” he says. While the villas it has for sale in Spain range between 400,000 and 780,000 euros, Dalima intends to position itself with “typical families who want a second home, at a similar price, a much better product,” says Galder Kabiketa. In fact, in this company they do not look for “super luxury” villas, but rather go for those that are around one million euros so that the participation of each buyer (one eighth) is 120,000 euros. Their installments cost between 94,000 euros for a villa in Moraira (Alicante) up to 212,000 euros for the Villa Preciosa de Jávea.
They trust that the idea will succeed in a Spain in which, with the pandemic, people “has more flexibility at work” and they move to second homes for part of the year to telecommute. Both companies offer the possibility of having an extra residence “without buying the complete houses”. In addition, in our country there are “a series of casuistries that we saw in the United States and that are repeated in Europe” that make this type of home buying and selling make sense.
“For me one of the most important and the most curious is that second homes are normally empty 11 months a year. That has a terrible impact on the property itself, on the owner and on the community they are in because no business is generated during the months in which the houses are unoccupied”indicates Ignacio Alonso.
Second homes are typically empty 11 months of the year. That has a terrible impact on the property itself, on the owner and on the community they are in.
Ignacio Alonso (Pacaso)
“If I had a second home, I would always be aware of whether the alarm went off, whether the pool guy went, whether the gardener went. With co-ownership, we can forget about this. A person who is going to spend six weeks in his second home throughout the year you know it will be fine, tcalm down knowing that everything works and that he only has to show up”, explains Ignacio Alonso. In Dalima and Pacaso they have teams, their own or subcontracted to local companies, who take care that the house is in perfect condition throughout the year.
In addition, Pacaso has the figure of the home manager, a kind of governess for each house that has a double job: towards the property and towards the owners. She supervises that the house is well, that everything works, that everything is in order and, in turn, she is the point of contact with the owner in case she runs into any problem or has an unforeseen request.
“As there is a relationship between home manager and the owners, if there is any special request, it can be done. we tried facilitate everything as much as possible, but we are not a concierge service. We cannot get into a business that is not ours because it would defocus us from what is really ours. But we try to help as much as possible and it is achieved”, clarifies the person in charge of corporate relations in Europe at Pacaso.
next destinations
Dalima and Pacaso do not set their sights only on the shores of the Mediterranean. “The objective is, in the medium-long term, to expand this range of housing supply both above and below,” announces Alonso, who assures that Pacaso, which is already present in the United States and the United Kingdom, it wants to expand in our country beyond Marbella and Ibiza, to quieter destinations in Spain.
To do this, they must popularize the concept “because this co-ownership model is not traditional in Spain and we are in the process of explaining it.” In Dalima, they want to “lead” the south of Europe with new houses in Spain, France, Italy, Greece and some ski destination.
Choosing which home is worth advertising in Dalima or Pacaso is not an easy task. Finding the right villa entails “many visits”, admits Ignacio Alonso. “We are looking for modern houses, which have to be special but not unique. I may like an Arab-style house, but it is difficult to sell it later and for eight different people to like it”. He considers that it is necessary to be “a little standard within luxury and modernity”.
Pacaso’s properties have “very high qualities” and an architectural combination of “views, terrace, swimming pool, which give something special to the house”. They all have to have a basic part: eight storage rooms for each of the owners and they usually have a gym, even if it is a “small one so that there is always a place to train”, and a part of home officewhere the owner “can work as if he were at home”.
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