Reverse migration of youth from metros to their home towns amid the Covid-19 outbreak has prompted managed home rental start-up, Nestaway Technologies to launch a partnership/franchise business model to tap growth opportunities in Tier-2 and -3 cities.
With over 60,000 homes across 16 cities, Nestaway saw over 10,000 people vacating their rental homes in the last three months to go back to their home towns. In parallel, since the start of July, Nestaway has seen a three times surge in home owner requests from smaller towns and cities asking the company to manage their homes.
“Pre-Covid, our tenant base was crowded in central business districts and few busy areas in Tier I cities. We see a tectonic shift in consumer behaviour now — over 85 per cent of tenants with us belonging to knowledge jobs, now prefer far off locations and nearby smaller cities as the rents are cheaper and they do not have to commute to work daily. While our existing model works best in busy pockets of the city and offers a full-stack service to make living easier, post COVID, customers want less rent and less services. At the same time, we have also seen a three time upsurge in owner requests from smaller towns and cities asking us to manage their homes which we used to turn down earlier under serviceability grounds. We need to be where tenants are. That is why we have decided to add a franchised version of our services so that local entrepreneurs can customize it as per the need of customers in their geographies. That way the service becomes available to more people and more jobs also get created” Amarendra Sahu, Nestaway’s co-founder and CEO, told
The new franchise model of business will be live in Vijayawada, Chandigarh, Indore, Jaipur, Agra, Nagpur, Patna, Lucknow, Kolkata, Ludhiana, Faridabad, Bhubaneshwar, Salem, Coimbatore and Kochi. “With the growing acceptance of buying services online, we are confident of finding both owners and tenants beyond metros and doing at least 30 per cent of our business from non-metros in the next two years. We are currently at 35-40 per cent of pre-Covid demand and expect this to spike to 70 per cent with the franchise model” said Sahu. Covid-19 has caused massive disruption in the home rental industry especially in metros with an estimated 30-50 per cent reverse migration of youth from metros to their hometowns. Job losses, salary cuts and furloughs have further compounded the problem.
Founded in 2015 by Amarendra Sahu, Deepak Dhar, Jitendra Jagadev and Smruti Parida, Nestaway is present in 13 cities including Bengaluru, New Delhi, Greater Noida, Chennai, Faridabad, Gurgaon, Pune, Hyderabad, Ghaziabad, and Mumbai. Currently, Nestaway which is backed by Tiger Global, IDG Ventures, Ratan Tata, Yuri Milner and Goldman Sachs has more than 50,000 tenants and 60,000 homes in its network. The company acts as a property management firm for house owners by connecting them with prospective tenants and providing services from renting to re-renting, creating the rent agreement, renewing it, handling property damages, legal disputes etc.