When we think of booking a place on Airbnb, we typically associate it with a temporary stay, but it's officially become a gateway for would-be homeowners to secure a permanent pad.
Founded by entrepreneurial team Yifan Zhang and Adam Stelle, the Seattle startup Loftium offers a unique form of down payment assistance to Airbnb hosts who need cash to put towards home purchases. The agreement is pretty straightforward: Loftium fronts $50,000 for the down payment with the caveat that the homeowners must continuously list a bedroom for short-term guests on Airbnb for a period of 12 to 36 months. The majority of that rental income is then shared with Loftium, resulting in a real estate win-win for all parties involved.
In an interview with The New York Times, Zhang described the benefits prospective homebuyers gain from accepting down payment in exchange for a portion of their hosting earnings.
"It's for the people who don't have the parents to help, or the high income to save while paying rent," she said. "They are just stuck trying to save for a decade or more before they give up."
In addition to offering financial help, Loftium also goes the extra mile to help buyers secure loans. According to the company website, the program assists future homeowners by connecting them with a "Loftium-eligible lender" to get pre-approved for a mortgage. The deal also comes with a welcome package where Loftium helps new homeowners set up their Airbnb rental with an automated keypad, linens and more.
Another way the revenue-sharing program hopes to give homebuyers a leg up is by reducing the risk involved.
"We are trying to put as little risk on the homeowner as possible," Zhang said. "That money up front is yours as long as you abide by the contract."
For now, Loftium is only available in Seattle, but there are possible plans to branch out to four more major cities in the upcoming year.