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The Most Millennial Startup Ever Will Front Your Down Payment In Exchange For Airbnb Hosting


If the media is to be believed, millennials are excellent at only one thing, and that’s killing off other things. While we’re allegedly responsible for the demise of absolutely everything—from Applebee’s to bar soap—one of our most commonly cited assassination attempts is home ownership.

But in true millennial fashion, millennial entrepreneurs are finding solutions to millennial problems. Can’t afford a down payment? It turns out there’s an app for that.

Twenty-nine-year-old millennial Yifan Zhang is the co-founder of Loftium, a new startup that offers its customers a revolutionary method of financing the down payment on a home. Loftium will front your down payment in exchange for two-thirds of the money you make from renting out a room in your new house on Airbnb for a period of one to three years. Instead of a typical loan, the company signs a revenue-sharing agreement with its clients.

New Solutions Define Personal Responsibility

For millennials with large student loan payments, or for those living in expensive urban centers, making a traditional down payment is increasingly hard. Boomers can scold millennials about avocado toast all they like, but brunch is far from the most significant obstacle to home ownership for the young. Down payments have become a large barrier to home ownership, which explains low millennial ownership rates even in “flipped” cities, where young professionals can potentially save on monthly expenses by purchasing a comparable apartment to their current rental.

There’s a reason the Old Economy Steve meme has resonated across the plains of the meme-scape. Millennials have been dealt a bad economic hand, and while some have indeed gone on to play a bad hand badly, even fiscally-responsible millennials have had to grapple with graduating into one of the worst economic climates in decades, high student loan payments, and a job market that requires mobility.

That doesn’t mean millennials should whine about their lot in life, which has included a lot of advantages. But it does mean that traditional economic structures and strategies will need an entrepreneurial refresh.

This Is A Free-Market Win-Win

Potential homebuyers with less ability to save up large sums have two options: continue paying rent indefinitely, or take out a risky loan with as low as a 3.5 percent down payment requirement. Some go ahead and buy with down payments that could be irresponsibly low; the 20 percent upfront standard is becoming rarer, and the average first-time homebuyer puts down just 8.2 percent.

Rather than drop down payment expectations, Loftium offers a third solution: leverage the sharing economy to make your new asset pay for itself.

In a feature that is likely to be key for debt-saddled millennials, Loftium assumes the risk involved in the transaction. Your end of the bargain is to list your place, and Loftium, not the homebuyer, will take the hit if the room doesn’t generate the income expected. The low-risk nature of this kind of proposal appeals to young people who have already been burned once by student loans that assumed large post-graduate incomes to pay them off.

Zhang’s brainchild is a win-win solution for everyone: millennials already friendly to homesharing get to buy their own homes and earn a little extra cash towards their mortgages, Loftium makes its investment back plus profit, and Airbnb travelers enjoy more options to let.

Sometimes a Lifestyle Choice is Just That

Conservative cultural critics should be careful about conflating personal preference with deeper cultural or moral assessment. Go too far down the road of “the Boomer way or the highway,” and we risk feeding the unflattering stereotype that conservatives are just the latest iteration of the previous generation shaking its fist at the ways of the next.

A free society has room for people who prefer experiences or travel over home ownership, or avocado toast over pancakes at home. Conservatives should absolutely criticize millennials—and anyone, for that matter—when they demand that others subsidize a lifestyle to which they feel entitled. But we can and should be careful about defining which issues are worth a line in the sand and which are just lifestyle preferences.

Finding an innovative way to finance a home purchase isn’t a moral issue, nor does it impact anyone other than those entering into a Loftium-style contract. And sharing assets among several people is nothing new: long before Uber, Lyft, Airbnb, Getaround, and other sharing economy companies existed, taxi drivers were pooling their money to purchase shared (cartel-priced) medallions.

Having a stranger crashing in the spare room for a couple of years will definitely not appeal to everyone, and that’s okay. For Loftium’s likely urban millennial clientele, though, this is a great free-market solution that makes some Americans’ dreams possible.