1 mansion, 8 owners: how luxury timeshares work

The outlay is not exactly low, but R$185,000 for an 88-square-meter apartment in Campos do Jordão, a tourist town in the Mantiqueira mountains, is practically a bargain. Whoever closes the deal, however, will not have exclusivity – they will be co-owner with seven more people and will be entitled to 44 nights at the property per year.

The design of the business is that of timeshares, known in the hotel market through the sale of rooms to several owners, and which now reaches luxury residences.

In the United States, the model was popularized by the billionaire startup Pacaso, the biggest inspiration for Brazilian MyDoor, which is now trying to make the model viable in Brazil.

At the heart of these companies’ operations are vacation properties, traditionally underused – they are “second homes” on beaches, mountains and premium rural regions, such as Itu, Campinas and Indaiatuba. In general, destinations that do not require air travel or advance schedules.

The available quotas currently offered start at R$ 185,000, for the Campos do Jordão apartment, and reach R$ 1.9 million, for 1/8 of a 700 square meter house in a high-end condominium in Itu, o Terras de São José I. There are also houses and apartments in Riviera de São Lourenço (in Bertioga, on the north coast) and on the beaches of Maresias, Cambury and Baleia, all in São Sebastião, also on the north coast of São Paulo.

For businessman Marcel Cavalli, 42, who owns 12.5% ​​of a house in Cambury, the purchase of a share –of R$399,000– turned out to be a more viable option, due to the smaller investment compared to buying a property alone.

Fábio Godinho, founder of MyDoor, says that currently 100% of the company’s customers could afford the full purchase of the property. Most buyers have a monthly income above R$30,000 and have children up to 15 years old. The average ticket is R$ 700 thousand.

Choosing the fraction has more to do with the solutions that the business model is delivering. Something like having a vacation home without having to worry about all the problems it can cause, from electrical to humidity.

“The guy pays BRL 5 million for a property and spends BRL 15,000 a month to maintain it. We want to make luxury accessible at a much lower price.”

An important part of the appeal of the business is precisely the management of the properties. In addition to organizing the periods of use for each owner, the company takes care of maintenance and hospitality – from grocery shopping to restaurant reservations and tours.

The company keeps 4% of the global value of the properties to pay for these services, with the exception of supermarket purchases, which are charged separately.

All properties on the MyDoor base are currently ready to use, complete with furniture and appliances. To manage the use by each family, there are individual layettes, for example.

This convenience, for Cavalli, was another positive point in the acquisition of the quota, which allows the owner not to worry about maintenance or cleaning. “And the main thing is the use of weeks, which are more than enough,” he says.

According to Godinho, the 44 days per year to which each owner is entitled correspond to the average use of vacation properties. If, for any reason, the shareholder rightfully maxes out his days, he can purchase extra dates at the cost of a standard daily rate in the region.

On the other hand, the model also allows unused days to be put up for rent on hosting platforms like Airbnb.

The bet of proptech (as companies in the real estate sector that operate through technologies are called) is also to fill gaps in the secondary market, where negotiations of used properties take place.

Traditional real estate credit lines favor new properties and first homes. For those looking to buy a second property, interest rates are high. Then there is difficulty selling. A property in Campos do Jordão takes up to three years to sell.

MyDoor has R$ 200 million in cash to provide its own financing, with interest of 12% per year. Co-owners can finance up to 100% of the value of the shares.

Currently, the residential timeshare operation is concentrated in São Paulo, but Godinho has plans for expansion. With experience in the tourism sector —he was an executive at CVC and WebJet and headed the GJP hotel and resort chain until he left to found the company—, he sees prospects of replicating the model in Northeastern states, such as Bahia, and in Balneario Camboriu (SC).

Timeshare is popular with hotels, which have also embraced timeshares

Timeshare has been a practice in large hotels and resorts since at least the late 1980s. In this model, the customer buys the right to use a certain number of nights at the hotel, but does not own the room.

In timeshares, each owner has a registration and owns a fraction of the property or enterprise. Even so, they are fractions of an average ticket of R$ 50 thousand. In most operations, each owner enjoys an average of 42 days a year.

For Godinho, from MyDoor, an advantage of residential co-ownership is the possibility for each owner to define the use of their days — it is possible to take friends, for example.

UNDERSTAND THE DIFFERENCES IN MODALITIES

Timeshare

• It is the purchase of a fraction of a property
• Each fraction —or quota— is equivalent to one or more weeks of use per year; it is possible to buy more than a fraction
• Each quota has its own registration registered at a notary’s office and can be sold or become an inheritance
• Usage weeks can be fixed, defined in contract, or rotating
• When it occurs in hotels, the shareholder can exchange his time for daily rates at resorts of the same group

timeshare

• It is the advance purchase of hotel reservations; the value is converted into points, used to book rooms for a few years
• The user can donate the reservations made with their points to someone else, or sell them in groups and sales sites
• Nights purchased with Points are often cheaper than the price paid by other guests
• It is possible to book more than one room at the same time
• You need to make your reservations in advance, as there are no pre-set dates