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This article is reprinted by permission from The Escape Home, a newsletter for second homeowners and those who want to be. Subscribe here. © 2022. All rights reserved.
Buying a first home — let alone a second — is stressful in normal times. And with rapidly rising interest rates and intense competition, now is anything but normal (in so many ways!). Enter Summer. The startup, co-founded by former Airbnb employees Woods Buckley and Paul Kromidas, intends to make second home-ownership straightforward, low risk and generally pain free — or, in their words —helping someone to own a vacation home that pays for itself. The Escape Home’s Danielle Hyams chatted with Buckley to get the scoop.
Escape Home: What was the impetus behind Summer?
Buckley: In the beginning of 2021, we started chatting and we saw the rise of companies like Pacaso — there were a lot of businesses that were taking off around that time in the tech space exploring different ways of making home ownership more accessible.
The fractional model never made sense to us in terms of this idea of dividing a home into eight pieces. But the problem felt like a real problem, which is buying.
Escape Home: Explain
Buckley: There are three main reasons people don’t buy a second home, or a home in general. The first is the high upfront cost, the second is the brain damage of it — the time, the search, the purchase and managing all of it all and the third is fear and uncertainty around the asset class. A lot of people aren’t super educated on real estate, it’s very complicated.There are a lot of questions, ‘Is it a good home?’ ‘Is it going to appreciate?’ ‘What if I don’t like it?’ So in its simplest form, we set out to build a business that will reduce friction across those three buckets to allow more folks to enjoy access to a second home.”
Escape Home: Can you walk me through how it works?
Buckley: We have basically a try-before-you-buy model. What that looks like is we can help you find a home that you love in a market. Summer would then buy the home on your behalf and be the deeded owner of the home. You, as a prospective homeowner owner, would pay two things: a refundable upfront fee and a monthly subscription that corresponded to your usage of the home. In exchange you get to use the home whenever you want throughout the year. You get summer taking care of 100% of the cost associated with the home, so everything from taxes and insurance to property management, replacing broken light bulbs, wine stains etc.
As the prospective homeowner, you would have an exclusive option to buy this home at any point for up to three years. If you decide to purchase the home, we apply your initial payment and your monthly payments toward the purchase price of the home. If you decide it’s not for you, we will refund 100% of your initial payment and you’re free to go on your way.
As someone who has always wanted to own a home but I also love traveling, the idea that I can have the benefits of owning a home but still have access to a broad network of properties I can stay in where I’m not wasting money like at an Airbnb is really attractive to me from a customer lens.
One of Summer’s properties in the Catskills in New York.
Summer
Escape Home: How did your time at Airbnb inform Summer?
Buckley: While Paul and I were at Airbnb, we just saw what a shortage there was of high-quality Airbnb homes in the short-term rental space. There’s a ton of inventory out there on the market today, but a lot of just sort of — for lack of a better word — crappy. People just bought a lot of Ikea furniture and shoved it in an apartment. You’ll hear Brian Chesky, the CEO of Airbnb, say that if he was going to start Airbnb today, he would start with Airbnb Plus, because having a high-quality Airbnb really is still somewhat rare. There is less saturation of that asset type right now.
Escape Home: How do you determine the monthly subscription?
Buckley: It is based on short-term rental rates in that market and how often you want to go. We do take into account peak and off-peak days. You can open the Summer Homeowner app and as you book the days, your subscription balance declines. You can also use that spend at any home in the Summer network. So you really get the value of homeownership along with the flexibility of Airbnb or renting. The subscription is a three-year trial period where you can buy the home at any point, but if you don’t want it you are locked in for three years.
Escape Home: Who is your target clientele?
Buckley: We noticed that most of the folks that tend to be interested in this are in their late 20s to mid-40s. It mostly has been couples with combined household income of $250,000+ and interestingly, most of the people coming to us though do not currently own a home. They rent their primary residences and are interested in owning a property that they can go and use and really, what they’re thinking is ‘I want somewhere I can go stay and I don’t want to lose a bunch of money, I’m OK if I don’t make money on it today, but I want the option to earn money on it in the future.’ They see this as a way of getting exposure to real estate, getting access to an asset they can enjoy and use with their friends and family and the idea that they could buy it in the future and can start renting it out and making money is attractive to them.
Escape Home: Do the homes come fully furnished?
Buckley: Yes, and members are very involved in the design aspect — we want to make sure it matches their aesthetic. As part of our process we present our members with a moodboard and let them give input on the design and create a home that reflects their preferences as well.
The interior of one of Summer’s properties in the Hamptons.
Summer
Escape Home: Where are Summer properties located?
Buckley: Our approach from a marketing standpoint was to start in urban centers and we started with New York, so we launched in markets where New Yorkers want second homes: the Hamptons, upstate New York, Miami, the Rockies and southern California. Our goal is that we have another set of five markets we hope to launch in the next two to three months in the Vermont area, California toward Tahoe and NorCal. The other spots we are still debating. We have had a lot of people asking about Hawaii.
We are also focused on making sure we have a balance of home price points in the markets we are in, so the Hamptons and Miami for example are expensive. We want to make sure we have markets like upstate New York where you can still buy a nice vacation home for less than $500,000.
This article is reprinted by permission from The Escape Home, a newsletter for second homeowners and those who want to be. Subscribe here. © 2022. All rights reserved.
