Chicago-based real estate fintech startup, NestEgg launches a tool to automate rental unit … [+]
NestEgg
Real estate financial technology company, NestEgg announced today a new program for collaboration between property maintenance contractors and small-scale landlords.
Bring your own contractor, (BYOC), is NestEgg’s latest feature, which automates and streamlines the maintenance process by scheduling repairs and handling bills, while letting landlords spread the cost in accordance to their cash flows.
“We know that about a third of [independent landlords] have existing contractors who they know and have a working relationship with” says Eachan Fletcher, CEO and co-founder of Chicago-based NestEgg. “We allow contractors to come onboard seamlessly.”
When the need for a repair arises, NestEgg will work directly with the renter and the contractor, removing the need for the landlord to act as an intermediary.
“By far the most time consuming part of being a landlord is getting maintenance issues resolved,” says a NestEgg customer with six rental units in Texas. “NestEgg coordinates repairs directly from beginning to end with my tenants and contractors I’ve been working with for years, saving me countless hours.”
Through BYOC, NestEgg can also suggest vetted contractors to landlords who may not have trusted maintenance partners.
Developed after surveying both landlords and contractors about “pain points” in their businesses, the BYOC feature debuts in a time when repair requests appear to be growing. NestEgg saw a 70% increase in maintenance issues during the pandemic, which has confined many tenants to their units.
The demand strains both landlords and maintenance crews, who, in some parts of the country, operate with reduced personnel and on abridged schedules due to Covid. At the same time, mom-and-pop rental property owners now face the financial insecurity of irregular rent payments due to the current economic downturn.
“Landlords have more uncertainty about what’s going to happen in the future,” says Fletcher. “We don’t want landlords to be in a situation where they have to choose between giving renters a fully functional place and, then, getting behind financially personally.”
To that end, NestEgg can cover the cost of maintenance upfront, allowing landlords to eventually pay up at the time of the month when rent comes in.
“We’ve managed to use smart financial services and clever technology to make sure that the job can still get done and the contractor still gets all the money,” Fletcher says. “And, we provide a way to spread the cost for the landlord at no extra charges.”
A FinTech company for the biggest challenges in the rental market
The company has employed that philosophy with its property management and rent collection tools, as well. Its rent advance program, for instance, promptly deposits the rent amount and follows up with residents on any late payments.
“For landlords who are in the [mom-and-pop category], their goal typically is to get to some form of financial independence through real estate,” Fletcher says. “But they usually get stuck somewhere on that journey. They get stuck because of cash flow [problems] and because of the time commitment. These are the two problems NestEgg solves.”
The company, which launched in 2018, emerged because Fletcher and co-founder Jeff Slipko, who had both previously worked for travel website Expedia EXPE , could not find the solutions they needed as small-time landlords.
“We had tried everything out there on the market today,” Fletcher says. “We just couldn’t find anything that we felt really helped us with the biggest problems that independent landlords face.”
Some of those challenges include rental income that is more volatile than it appears to be, an enormous time commitment as well as pressure from large-scale property owners, Fletcher says.
“There’s a lot of apps out there for independent landlords that help them market their properties, deal with inquiries and background check potential tenants,” he says. “As soon as you start getting into payments or as soon as you have a leak under the sink, you’re on your own. If you’re not solving those problems, you’re not truly helping the segment in a meaningful way.”