Co-Ownership + Short Term Rental

[Jeff Klonowski]

I'm currently exploring a new build construction as both a vacation home + short term rental. However, I'm looking at a scenario of co-ownership consisting of 4-8 investors. The idea is each investor gets a fractional percentage ownership in the property (think similar to Pacaso) + an allocation of time to use the property as a vacation home. The remaining availability would be scheduled out as a short term rental. In the case of Pacaso, you only have an ownership stake with rights to use the property + tax benefits. There is appreciation potential, but no additional cashflow opportunity. 

In this scenario, the owner(s) would get:

1.) Access to a vacation home

2.) Appreciation potential

3.) Tax benefits

4.) Cashflow as a short term rental when not in use by a co-owner. The primary goal would be to utilize the cashflow to at worst break even on costs associated with financing, management and maintenance costs. Ideally, we finance no more than 50% with long term debt. 

Other notes: 

- This will likely be setup as a 506(b) or 506(c) 

- Land/Lot is already secured and currently aligning an architect for design.

- Goal is to have property built & ready for use / short term rentals by Spring 2026. 

- Location is Central Wisconsin in an up & coming vacation area. 

Has anyone done this before? If yes, any key learnings or considerations?