# Airbnb-ing your way to homeownership

By [Brandon Donnelly](https://brandondonnelly.com) · 2017-09-19

airbnb, downpayment-assistance, homeownership, loftium, owner, property, property-ladder, real-estate, seattle, uncategorized

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I just discovered an interesting new Seattle-based startup called [Loftium](https://www.loftium.com/). 

The way it works is that they provide down payment assistance (up to $50,000) to prospective homeowners as long as they commit to renting out one of the home’s bedrooms on Airbnb for 12 to 36 months. Loftium is positioning it as a way [to help first time buyers](https://www.geekwire.com/2017/loftium-will-help-buy-house-agree-airbnb-bedroom-split-profits/) get onto the property ladder.

Here’s an example of how the math might work (taken from [the New York Times](https://mobile.nytimes.com/2017/09/18/your-money/mortgages/loftium-airbnb-down-payment.html?referer=)):

![](https://storage.googleapis.com/papyrus_images/1b83af39fabf9db36d5719f14586eba8.png)

The details certainly matter a great deal here but, high level, the homeowner gets $50k upfront, ~$1k per month in shared Airbnb revenue, and the opportunity to buy a home. You just have to be committed to being a host.

And from Loftium’s perspective, they put out $50k at the outset and get back just over $28k a year for 3 years. Assuming these assumptions are correct, that’s a pretty good IRR. 

However, if the home doesn’t generate enough Airbnb income during the agreed upon term, Loftium is on the hook because the homeowner doesn’t owe anything after the “[services contract](https://intercom.help/loftium/faqs/is-loftiums-down-payment-considered-a-loan)” expires.

Think this will fly? Would you use it?

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*Originally published on [Brandon Donnelly](https://brandondonnelly.com/airbnb-ing-your-way-to-homeownership)*