Ever thought about owning a vacation home, but aren’t sure whether or not it’s worth the cost? Or maybe you already own a second home and are wrestling with the amount of money, time, and attention it requires for the relatively small amount of time you get to spend there.
Either way, the second home dilemma is real and has been something that many homeowners and prospective home buyers have struggled with for years. Luckily, thanks to an exciting new partnership Brick & Corbett has formed with Pacaso Homes, there’s now a solution to this problem; shared ownership.
Shared ownership isn’t a vacation rental, it isn’t a timeshare. It offers owners the benefits of homeownership without the high costs, hassle, and major time investment. We’re so excited to be the exclusive local partner for Niner Homes; in this article, we’ll tell you all about how shared ownership works and whether it’s a good option for you.
Traditional Options for Vacation Homes
Up until recently, if you wanted a vacation home, you had three routes you could take, none of which really provided the best option for many buyers.
Short-Term Vacation Rental
Instead of actually buying a place, you could find a great spot to rent every year. This is excellent in terms of flexibility – book when you want for as long as you want – but there are some other major downsides. For starters, you get no real option to customize a home to meet your needs. You are literally staying in another person’s property for the week, you get what you get when you show up.
Also, the cost to stay in properties like these is relatively high if you plan on staying for longer than a couple of nights. During the high season, many short-term rentals in Northern Michigan go for close to a thousand dollars a night, making a week or two-week stay an unreasonable expense.
Short-term rentals work for many, but if you’re considering a vacation home, they aren’t ideal.
The traditional timeshare is the next logical step up from a vacation rental. With a timeshare, you actually own…something. Well, actually, you own access to something, which isn’t the same thing as owning a property, but there is ownership involved.
Timeshares are great if you care more about the overall destination (like the resort you’re staying in) rather than the specific unit you occupy. The problem with timeshares is that you’re often limited to a very short window you can use the property (usually two weeks or less), and you have no control over exactly where you’re staying.
The other challenge with timeshares is they are notoriously bad investments; the typical resale value of a timeshare is somewhere in the neighborhood of 65% of what you initially paid for it. Why is this? Because unlike the traditional real estate market – a market that is currently experiencing record high prices as a result of very low inventory – the timeshare market inventory is EXPLODING right now. More and more timeshare units are appearing on the market every year, so even with steady demand, the price of this product is still going to drop.
Private Home Purchase
Up until now, if you didn’t want to stay in a vacation rental, didn’t want to mess with the headache of a timeshare, the last option was to actually purchase a second home outright. This sounds like the glamorous option – you’ll have your own house you can visit whenever you want, decorate however you want, spend as much time in as you want. All of that sounds great and is often the song that vacation-home seekers sing themselves, but they usually forget the second verse of that song: it costs a LOT to maintain a home, especially a second home.
Remember, you aren’t just paying for this home when you’re using it; you’re paying for it all year long, every year. You’ve got ongoing costs like a mortgage, maintenance, insurance, and taxes; taxes which, by the way, are going to be about double the rate of what you pay on your primary home thanks to the non-homestead tax rates in Michigan. Plus, you’ve got to stock the home, furnish it, clean it, pay for utilities, pay to keep it in tip-top shape, the sort of shape you need it to be in to actually be able to visit it and enjoy it when you’re on vacation.
If you want a place that is private, dependable, personalized, and will hold (or increase) its value, a private home purchase is the right move, but only if you can stomach all the downsides.
The Newest Innovation in Second Homes: Shared Ownership
What if you want all that upside and not all the downside? Finally, there’s an option for this.
Shared homeownership is the best of all the traditional options rolled into a new approach, eliminating all that pesky downside.
Partnering with Pacaso, The Brick & Corbett Group is the exclusive provider of this option in Northern Michigan. Here’s how shared ownership works:
- Brick & Corbett and Pacaso identify a property in Northern Michigan that would be a great fit for shared ownership. These are high end, new or new-feeling properties with location, amenities, and features perfect for discerning home shoppers.
- Pacaso purchases the property, then immediately sets up an LLC for the shared ownership group, dividing the ownership into as little as two and as many as eight shares.
- Interested buyers can then buy into the ownership of the property, up to 50% of the home.
- Pacaso manages the property, the maintenance, the taxes, the insurance – all the responsibility of owning a home and gives the benefits of owning the home to the owners.
- Using the cutting edge Pacaso App, owners can schedule the time they want in the home; as much as 26 weeks for owners with a 50% stake, down to six and a half weeks for owners with the minimum ⅛ stake.
That’s it. It really is that simple.
Are You an Owner of a Second Home in Northern Michigan?
If you own a second home in Northern Michigan that you aren’t spending enough time in, you should consider the Pacaso program. Our team is actively seeking owners of fantastic Northern Michigan properties that fit the description of an ideal Niner home to join this program. If you find yourself only spending a couple of weeks of the year here and are frustrated that you’re paying for the entire year, this is a great option for you.
You can sell your home to Pacaso, then buy back into ownership for as much (up to 50%) or as little (as low as ⅛ stake) as you’d like; giving you the time you want in the location you want with the privacy, quality, and location you desire, and without all the hassle of owning, maintaining, and paying for a full-time residence.
Are you Considering the Purchase of a Second Home in Northern Michigan?
If you’ve been thinking it’s time to get off the short-term vacation rental treadmill and buy a getaway spot, the Brick & Corbett / Pacaso option is a fantastic one for a number of reasons.
For starters, you can increase your budget of a home up to 8x! If you were first shopping with, say, $400,000, you can increase that budget substantially knowing that you won’t have to shoulder the entire burden of cost. The difference between a $400,000 home and a $1,000,000+ home is huge and can make your vacation home dollars feel much better spent.
Secondly, if you’ve never owned a second home before, having someone to manage all the logistics for you is a fantastic perk; it really allows you to focus on just enjoying the property rather than constantly be trying to take care of it.
Brick & Corbett is Here to Help
If you want to learn more about our partnership with Pacaso and how you can take advantage of shared ownership opportunities in Northern Michigan, the Brick & Corbett Team is here to help.
As the premier listing group in Northern Michigan, we are the go-to choice for luxury home buyers and sellers in this market, we have a ton of experience with second-home purchase and sales, and would love to help you navigate towards the destination of a fantastic spot to call your own here in our fair state. Reach out today to find out what Brick & Corbett can do for you.