What Does Co-Ownership Mean When Buying A House

  • Josh Dotoli
  • 11/15/21

Looking to buy a luxury vacation rental for a fraction of the price? Fractional home ownership could be the best option for you. Fractional homeownership or " co-ownership" is a term that describes the luxury of owning a  residential or commercial property without having to be responsible for everything that goes along with it. Suppose you want to own a second home or enjoy taking frequent vacations to top destinations like South Florida. In that case, fractional homeownership might be something that interests you. 

Dotoli Group has partnered with real estate start-up " Pacaso" to provide an alternative solution for luxury vacationers looking to extend their stays.  This form of homeownership allows you to own part of your luxury vacation dream home that would typically cost millions for a fraction of the price. Before we dive into how it works, you need to understand the different types of " co-ownership."

What Exactly Is "Co-Ownership"? 

Co-ownership of property means more than one person has an ownership interest in a piece of real estate. There are different types of co-ownership, including tenancy in common, joint ownership, community property, and tenancy by the entirety. 

Tenancy in common: For many people, tenancy in common is a great way to have an ownership stake without having any upfront costs. Two or more parties can buy the TIC with equal investment qualifications, and there are no limitations on how many owners you may have, depending on your situation! 

Joint ownership: Joint tenancy with rights of survivorship (JTWROS) is a legal agreement that specifies tenants hold equal ownership. This holds true even if only one person paid for the property — anyone listed on their deeds has full rights and control over it.

Community Property:  In nine states, married couples may share the title as "community property." Couples are considered a single financial entity in these states (Arizona, Texas, California, Idaho, Louisiana, Nevada, New Mexico, Washington, and Wisconsin). A right of survivorship must be established so that when one partner dies, the other can automatically take over the title.

Tenancy by the Entirety: A tenancy by the entirety is a joint ownership type that allows widowed spouses to inherit their deceased spouse's share. Married couples must sign an agreement and provide information about themselves, such as how much they own or whose life insurance pays off the mortgage if one spouse dies with no will in place.

What Kind of Co-Ownership Does The Dotoli Group and Pacaso Offer?

The structure of Pacaso is unique compared to the above-mentioned co-ownership options. Pacaso allows for up to eight owners to share a 1/8 ownership stake in the LLC, and the LLC is named the owner on the deed. You own 1/8 to 1/2 of your property, with maintenance, management, and day-to-day expenses are taken care of by the LLC. Because Pacaso restricts the number of shares per home to eight, you and just seven other owners will have access to it (only one owner will live in the house at a time, of course). In addition, Pacaso homes are exclusively dedicated for the use of owners and their visitors.

What Is The Difference Between Pacaso Co-Ownership And a Timeshare?

One of the most significant distinctions between Pacaso and a timeshare is what you own. You own a genuine property asset with Pacaso. Your share is real property, not simply a block of time. And because it's a real estate asset, its value will fluctuate with the market, allowing you to profit from any equity earned over time. A timeshare, in essence, is a rental property. You typically own the right to use the facility for a set period rather than the property itself. That's why you can't usually get a conventional house loan to buy a timeshare — there's no "home" as collateral, just time. Personal loans and home equity loans are used to pay for a timeshare. Because a timeshare isn't a real estate asset, the value will most likely depreciate over time, much like a new automobile's value deteriorates as soon as it leaves the dealership.

If you are interested in owning luxury vacation rentals for a fraction of the costs, this is your opportunity to learn how it all works! Contact us today by calling 954.799.6403 or email Info@DotoliGroup.com  to discuss the features and benefits of co-ownership through DOTOLI & Pacaso.

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