Many people are attracted to the allure of owning a second home with the potential for generating extra income, accruing another asset, and always having a place to vacation. However, the thought of having to worry about additional expenses, maintenance, managing short-term rental tenants, and the like can also be daunting. Summer is a tech-enabled platform to make second homeownership more accessible. Prospective homeowners can work with the company in two different ways: either through a property management arrangement or through an innovative rent-to-own program. In both cases, Summer will work with the potential homeowner to identify properties using its proprietary AI and analytics engine that will maximize short-term rental income potential while managing all aspects of the design, furnishing, and renovation process for the property. Those who opt for the rent-to-own option, dubbed the ‘Gradual Ownership’ model, can secure the property with as little as 15% down with the added flexibility of testing out the experience before committing to the full ownership experience. The company currently has 18 different active property listings on Airbnb available for rent.
AlleyWatch caught up with Summer Founder and CEO Paul Kromidas to learn more about the business, the company’s strategic plans, latest round of funding, which brings the company’s total equity funding raised to $81.5M, and much, much more…
Who were your investors and how much did you raise?
Series A round with $18M funding round from a group of leading investors, including QED and Viola FinTech, as well as a secured debt facility of up to $50M from Setpoint Capital. Contributing investors for the funding round include Lightspeed Venture Partners, 1Sharpe Ventures, CT Innovations, Alumni Ventures, Elizabeth Street Ventures, Merrimac Corporation, Gaingels, Firstminute Capital, and Not Boring Ventures.
Tell us about the product or service that Summer offers.
Summer is on a mission to provide more people with access to a second home. We have a few different options to buy, whether it be Managed by Summer (where you are the deeded homeowner with Summer as your partner every step of the way during the buying, furnishing, property and guest management processes) or our Gradual Ownership model, (designed to give you the flexibility of renting with the value of ownership; think of it as getting to try, before you buy). No matter how you decide to buy, Summer is your expert advisor for acquiring, designing and managing your dream vacation home.
What inspired the start of Summer?
Growing up in New England, I had a friend or two whose parents had been fortunate enough to own a beach home in Cape Cod, or a mountain home in Vermont. I always enjoyed visiting when invited, and noticed how much meaning it brought to their families. It was somewhere that was special – a place for them to unplug, recharge, and reconnect with each other and their surroundings. In some cases, the home had been in their family for generations, passed down from a grandparent or parent. My family couldn’t justify the costs of owning a second home, and there was no way to lower your costs of ownership back then. I remember thinking how I’d love to own a second home myself one day – if I could afford it – somewhere I could unplug and spend meaningful time with friends and family.
I left Airbnb in 2020 after 2 years leading Product, Strategy, and Operations teams across various parts of the business. One thing that had always stood out was how dependent the business was on the best hosts, the ones who manage the highest quality short-term rentals on the platform. These are the homes that are constantly in demand – they have the highest reviews and are almost always occupied – because they’re consistent. Consumers know what they’re getting, and are willing to pay a little extra for that. By design, Airbnb doesn’t manage their own listings. Therefore, it was always very hard to ensure that all of our hosts shared this view of quality.
I began to think more about this problem in relation to what was happening in our world at that time. Folks were traveling more than ever and living more flexibly. Many folks started to see the value of having somewhere to call home that isn’t your primary residence, and in some cases were making this their first purchase. However, there was still no easy way to do this, and most people were still held back by:
- High upfront costs (typically 25%), and the continued monthly costs of ownership (mortgage, taxes, insurance, maintenance)
- The time to search, purchase, and potentially manage your own property
- Fear and uncertainty around real estate as an asset class and investment
So, I set out to build the solution: Summer
At Summer, we redesigned each step of the ownership process to be buyer-first – from home selection, purchase and design to rental logistics, maintenance and property management. We want you to not just become a homeowner but keep you as one.
How is Summer different?
Our unique model is called Gradual Ownership. We consider it the smartest way to buy a vacation home. Here’s why:
- Pay less and gain more equity – Pay as little as 15% down and earn more with your monthly payment than a traditional mortgage.
- Save time and money – We take care of everything – from design, construction, to property management. We also cover taxes, fees, and paperwork.
- Get to try before you buy – You have the ability to see how your home performs before buying it outright.
- Flexibility to walk away – If at the end of 2 years you decide not to buy, you get your initial payment back and walk away. No strings attached.
We focus on de-risking the investment as much as possible by letting you try the home before buying it, so you can fall in love with the home and see how it performs before you fully commit.
What market does Summer target and how big is it?
Summer is for anyone who has considered purchasing a vacation home, but the traditional barriers associated with ownership have prevented them from doing so – high upfront costs, the time to find and purchase a home, designing, furnishing, and managing a property, or just general uncertainty or fear about real estate as an investment. Summer is expanding nationally, and currently has properties in our network in the Catskills/Hudson Valley NY region, the Hamptons, Park City, Miami, Joshua Tree, and Coachella Valley.
What’s your business model?
We are building the complete vacation home solution. Starting from the beginning, where we use our “Zestimate for Short-term rental income” to determine how your home will perform with a very high confidence interval. We have a few different options to buy, whether it be Managed by Summer (where you are the deeded homeowner with Summer as your partner every step of the way during the buying, furnishing, property and guest management processes) or our Gradual Ownership model, (designed to give you the flexibility of renting with the value of ownership; think of it as getting to try, before you buy). No matter how you decide to buy, Summer brings the tech, management, and network to create the complete vacation home solution.
How are you preparing for a potential economic slowdown?
Given the current unfavorable environment for venture fundraising in the U.S., the close of this funding round is a testament to Summer’s innovative business model and how the company is uniquely positioned to carve a new path for homeowners seeking to own a second home. As Summer is on a mission to provide more people with access to a second home, resources allocated to advancing technological development and expanding into new markets will serve new prospective homeowners and impact the industry at large. With our Gradual Ownership model, we buy the home for our members and then rent it out while they’re away.
We also cover all upfront costs and take care of all of the paperwork. You make an initial payment of as little as 15%, and a monthly payment, which are credited towards your purchase. Given the current interest rate environment, we give our members a flexible pathway to second home ownership, enabling them to achieve their dreams of owning a vacation home sooner.
What was the funding process like and where do you see the company going now over the near term?
Funding is undoubtedly harder to come by this year than previous years, but good companies still get funded, and there’s a need for our product. Summer will use the new funding to accelerate technological development, focusing on the advancement of proprietary acquisitions and the platform’s underwriting engine. Additionally, the company will continue to invest in new market expansion, increasing Summer’s pool of prospective homeowners served.
What’s your favorite fall destination in and around the city?
The Catskills and Hudson Valley – my family and I love to go upstate to hike and explore nature. Many homes in the Summer network are scattered around the area, which are perfect to enjoy all year long. Whether it’s staying in our Cherry Hill by Summer property to explore Minnewaska State Park, or Maple Ave by Summer right at the base of Hunter Mountain, there are endless activities for my family and I to explore.