What Are the Pros and Cons of Co-Owning a Luxury Home?

By Danae Aballi-Mecham

Danae Aballi-Mecham is a long-time real estate industry veteran. She has worked in various positions in the industry having grown from an independent real estate agent to running a team of 5 top producing agents.

Many people dream of owning a luxury home in Newport Beach or Laguna Beach, but the price often makes that goal feel out of reach. Properties in these areas can cost several million dollars, which places them beyond the budget of most buyers. A growing option called fractional ownership makes it possible to experience this lifestyle without taking on the entire financial responsibility.

What does fractional ownership mean? Fractional ownership allows buyers to purchase a portion of a property rather than the entire home. In most cases, this means owning one-eighth or, in some instances, a quarter of the property. The ownership is deeded, which provides a scheduled time in the home as well as a share of the appreciation when the property sells. Unlike a timeshare, which only offers usage, fractional ownership builds equity while still granting access to a high-value property.

Real-world examples in Newport Beach. Companies such as Pacaso offer luxury homes under this model in Orange County. Current examples include properties on Balboa Island and Balboa Peninsula. A one-eighth share in one of these homes is priced around $780,000, which indicates that the overall property value falls in the $7 to $8 million range. Buyers share the property with other owners, which means sharing both the cost and the time allotted for use of the home.

The trade-offs to consider. Fractional ownership is not without limitations. Time in the property is scheduled, so usage is not unlimited. Financing can also be more challenging, as many buyers either pay cash or rely on specialty loans. Selling a share may take longer than selling a whole property, since the market for fractional shares is smaller. Management fees are also included in the cost, which means the model is not designed to maximize investment returns but rather to provide access to a specific lifestyle.

Fractional ownership is not merely a vacation arrangement; it is a form of deeded ownership, offering both benefits and limitations. Buyers need to understand how the structure works, what trade-offs come with shared use, and how financing and resale may affect their decision. Review all terms carefully, consider the management fees, and be clear about whether your goal is lifestyle access or investment returns. Always consult with professionals who are familiar with these agreements.

Interested in co-owning a luxury property? Feel free to call or text me at 949-216-8565 or email me with your questions at danae@danaeaballi.com. I’d be happy to help you achieve your real estate goals, one step at a time.