Nestaway introduces franchise business model for expansion in smaller cities

Nestaway Technologies, an online home rental company, has started a franchise business model in order to expand into the smaller cities and towns in India. The development comes after seeing a three times uptick in owner requests from smaller towns and cities.

The company said more than 10,000 people have vacated their rental homes in the last three months and have gone back to smaller cities or their hometowns. This finding is based on Nestaway’s internal migration and tenant exit data.

After observing such a high upsurge from smaller cities, Nestaway is targeting to do at least 30% of its business from non-metros in the next two years.

Amarendra Sahu, Co-Founder and CEO, Nestaway, said, “We need to be where tenants are. Pre-COVID, the tenant base was crowded in central business districts and few busy areas in Tier I cities. We see a tectonic shift in consumer behavior now.”

“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 fewer services,” he added.

In India, COVID-19 has caused massive disruption in the home rental industry as there has been massive reverse migration of youth to their hometowns, according to the reports. The reports claim that reverse migration is as high as 50% in cities such as Bengaluru with more than 30% of homes now lying vacant.

Sahu stated, “That is why we are taking the decision to add a franchised version of our services so that local entrepreneurs can customize it as per the need of customers in their geographies.”

Under the new franchise business model, the company has said that the independent property managers will be having access to the same product, technology, and know-how as the existing on-roll property managers.

Presently, Nestaway has over 50,000 tenants and 60,000 homes in its network.