In recent years, there has been a growing trend among younger generations to delay homeownership and instead invest in short-term rentals. This shift in behavior has sparked the interest of several startups, with one company, Summer, emerging as a promising player in this space.
Understanding Summer’s Proposition
Summer claims to use "data and analytics" to help customers predict short-term rental revenue and find a rental property that fits their needs and goals. The platform leverages AI and analytics to build an estimate of short-term rental revenue, which is referred to as the Zestimate equivalent for short-term rental revenue.
According to Paul Kromidas, Summer’s CEO and founder, "There are various risks and barriers that surround buying and renting out short-term rentals, and Summer is aiming to alleviate this challenge." Prior to founding Summer, Kromidas was a product and strategy lead at Airbnb, where he helped create Airbnb’s Luxe product.
Summer’s Membership Routes
Summer offers three routes to membership: gradual ownership, immediate ownership, or bringing an existing owned property to the Summer platform. Members who opt for the gradual ownership path choose a property from Summer’s portfolio, send a listing to Summer to see if it’s a fit, or work with Summer’s acquisition team to find a property on the market that meets their criteria.
Summer takes care of submitting offers, handling closing paperwork, and performing home inspections and due diligence. Additionally, Summer interior designs and furnishes the property. In exchange, Summer collects an initial payment as low as 15% of the home price and charges a monthly membership fee.
Perks of Membership
Summer members get credits that can be put toward stays at their own vacation home or any home within the Summer network. This may seem unusual, but Summer argues that the perks make up for it. Summer manages the property, including booking rental guests, and puts both the initial payment and monthly membership payments toward the owner’s eventual purchase of said property.
At any point over two years, if a member decides to buy their Summer-managed property, 100% of the initial payment and the monthly membership fee is credited toward their purchase. If they choose not to buy, after two years, they get their initial payment back.
Immediate Ownership
Members who choose to immediately purchase a property with Summer first submit their offer to Summer. If it’s accepted, Summer oversees the paperwork to completion, handles home inspections and due diligence, and interior designs and furnishes the property.
Summer’s Funding and Growth
In April 2022, it was reported that 17 rental-related U.S. companies raised a collective $1.3 billion from VC firms between February 2021 and April 2022. Summer declined to disclose its customer base or annual recurring revenue.
However, the company has secured funding, which will enable it to further develop its platform and expand its offerings. With Summer’s unique approach to short-term rentals and its focus on alleviating risks and barriers associated with buying and renting out properties, the company is poised for significant growth in the future.
Conclusion
The rise of Summer marks an exciting development in the short-term rental space. By leveraging AI and analytics, Summer aims to provide a more streamlined and efficient experience for homeowners and investors alike. With its focus on alleviating risks and barriers associated with buying and renting out properties, Summer is well-positioned to capitalize on the growing demand for short-term rentals.
As the company continues to grow and develop its platform, it will be interesting to see how Summer adapts to changes in the market and evolves to meet the needs of its customers. One thing is certain: Summer’s innovative approach to short-term rentals has the potential to revolutionize the way we think about property ownership and investment.
