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Vacation home investment and management company Summer is marching through autumn a bit more secure about how they’ll handle winter. The company closed a fundraising round of $18 million, according to a TechCrunch report.
Leading the round was QED and Viola Group alongside a $50 million debt facility from Setpoint Capital, according to TechCrunch. The company has raised a total of $30 million. Funds will reportedly be applied to market expansion, market awareness and backend R&D.
Summer CEO and founder Paul Kromidas, formerly in strategy at Airbnb, told TechCrunch the company is “layering artificial intelligence” into its short-term rental analysis. He called it “the Zestimate equivalent for short-term rental revenue.”
“There are various risks and barriers that surround buying and renting out short-term rentals, and Summer is aiming to alleviate this challenge,” he said.
Summer is a multi-faceted real estate company focused on the growing vacation home subset. It helps people buy second homes, manages them and also facilitates multiple forms of ownership, one being a membership-based long-term path and the other a more traditional immediate form of ownership.
Gradual owners pay Summer an initiation fee of at least 15 percent and monthly dues after that in exchange for full-service management and rental oversight for up to two years. That 24-month window gives owners the chance to “try out” the home while the fee and monthly costs are held to be put toward the full purchase should they decide to carry on with that property. If not, the monthlies are forfeited while the fee is returned.
Along the way, owners accumulate points that can be applied to the use of the home or others on the Summer network.
Consumers can choose from existing company listings or send potential matches for Summer’s consideration. The company can work directly with buyers to find an appropriate listing, as well.
Immediate buyers work with Summer in a traditional purchasing process, with the company serving as their buyer representative and full-service broker. Those who already own a second home can enroll it with Summer’s management team.
Homes that Summer acquires need to meet their algorithm’s requirements for profitability. However, it would be rare for a buyer to seek a home in a market that wouldn’t work. Especially these days. Summer handles interior design, too, if it’s needed.
Underlying Summer’s proprietary underwriting analysis is data from AirDNA, and it leverages VRBO, Airbnb and Booking.com to promote availability in its clients’ homes.
Unique pathways to second home and investment property ownership have been popping up across the industry. Some focus on lifestyle choices, like Summer and Pacaso, while other models, like Fractional, Groundfloor and Ark7, are innovating the way retail investors invest in real estate.
CrunchBase performed research on how the VC space is reacting to the growing landscape of rent-related technology, including alternatives in second and investment property ownership, finding that the reaction can be measured in the billions.
“Between July 2021 and April 2022, 17 rental-related U.S. companies raised a collective $1.3 billion from VC firms,” CrunchBase reported. The funds can be directly traced to the ongoing rise in average rent during that period, and the company also noted the number of aspiring homebuyers waiting out, or sidelined by, the current market conditions.
Inman reported last month that rent prices fell for the first time in six months during September.
After coming within two dollars of a historical high record during August, the national median rental rate dropped 2.02 percent in September, knocking $40 off the national median price, according to a report from Rent.com.
