Investors are betting big on NestEgg, a Chicago-based startup aimed at mom-and-pop investors, particularly those struggling to collect rent during COVID-19 times.
The company just closed a Series A funding round, having raised a whopping $7 million from VC firms like Hyde Park Venture Partners, Bonfire Ventures, Dreamit Ventures, and Financial Venture Studio, which has invested in a slew of other real estate-related platforms in recent years, including Point, Sheltr, and Flex.
What is NestEgg?
At its simplest, NestEgg is a DIY property management app designed for landlords. It helps with the leasing process, enables online rent collection, and helps coordinate maintenance and repair requests.
But the star feature is the financial protections it offers. For one, NestEgg will front the costs for property-related repairs and expenses, safeguarding cash flow and spreading those unexpected costs over two, four, or six months (interest-free).
It also offers Rent Advance and Rent Assurance features, which deposit rent into your account on the first of every month — no matter when your tenant pays up. NestEgg also includes up to four months of lost rent if someone fails to pay entirely.
Clearly, investors see the value in features such as these, especially in a pandemic that has hit renters markedly harder than other cohorts, creating challenges for tenants and landlords alike.
But despite these perks, NestEgg’s offerings aren’t all that unique. In fact, there are actually a few other options if you’re looking to safeguard your margins during these difficult times. Not sure which one is right for your properties? Let’s look at what’s out there.
Rent protection options
A number of property management platforms offer similar services to NestEgg. Zumper, for example, has its “Instarent Guarantee” program, which gives you up to 12 months of lost rent (versus four months for NestEgg).
Onerent has something similar, too. The management platform offers a Rent Guarantee that ensures payments on the third day of each month. It also covers up to one month of unpaid rent (though the program is currently on hold due to COVID).
Though Avail doesn’t offer the rent protection directly through its platform, it’s partnered with Steady Marketplace to provide low-cost rent insurance. Other companies offer rent guarantee insurance as well (RentRescue is a good example).
Here’s how these options compare: