Why Nestpick won’t be able to establish their start-up in the Netherlands.

If you haven’t heard about Nestpick already, here is what the guys at Rocket Internet have to say about their latest startup:

“Nestpick is setting out to “revolutionize the rental market for a new generation,” as it puts it, starting today in the U.K., France, Italy, and Spain — in addition to the Netherlands where it launched a few months back. It will be expanded to more markets across Europe and further afield too.”

So, they are aiming to bypass every single important step associated with securing a long term property. But fact of the matter is, not every market can be transferred into an online-only environment. Uber did a great job in kicking the established taxi company’s asses, and so did Airbnb for the short stay market. But the guys at Nestpick are making a fundamental mistake by comparing their business model to Uber and Airbnb. Here’s why..

1. So called Verified properties that aren’t actually verified

The biggest promise they make is that they are the largest online portal for verified bookings. But as it turns out, only a mere 15% of the listed properties is actually verified. But since they communicate that the portal offers verified listings, this can confuse the visitor in thinking that al properties are verified.

Ok, but what does their verification actually mean? This is what the FAQ on their website states: “The verification stamp on our images means that we have sent a professional photographer to the property to verify that the features are as described and to take accurate images of the property”

Ok hold on now, verified means they are sending a photographer? To take photo’s? That’s it? What about verifying ownership, or verifying that the property isn’t too noisy, or has a nasty smell, or a pot smoking flatmate, or better yet, check if the owner has a bad reputation or a criminal record like the one in this story from Michelle, a 20-year old travelling gal from Canada.

And seriously, verified listings does not mean scraping pictures from other websites like Medici living, removing the watermark and placing them on the Nestpick website, as stated by the CEO of Medici living: Robert Gmeiner towards Venture village.
2. The Nestpick handling fee is illegal in the Netherlands.

In their FAQ section, Nestpick states that they charge a one time booking fee of 25% of one months rent. Now one could argue about the amount itself, which can be considered as pretty high in comparison to the effort, but let’s look at the legal implications here.

In their verdict of October 16th of 2015, the High Council stated that from this date, it is considered illegal for anyone to charge a fee to the tenant, regardless of the circumstances. Real estate agents and websites can and may only charge a commission to the landlord of a property. This has been the subject of many years of court cases in the Netherlands so good luck in trying to avoid the penalty; refunds of all commissions charged to the tenants and a large fine.

Over the last couple of years, many realtors went bankrupt since they neglected to change their commission model from tenant side to owner side.


3. Nestpick refuses to be a party in the rental contract.

When asked, Nestpick states: Contracts are set up separately from nestpick, and are a private agreement between tenant and landlord.
The service Nestpick provides is to connect landlords and tenants, therefore we can not provide the contract prior to making booking requests.


Once the tenant and landlord have confirmed a booking we advise them to connect as soon as possible to work out the final details, such as:
1. Contract terms and conditions
2. Contract signing
3. Any final last minute questions or information (i.e. about flatmates)
4. Date of move in and time and place to meet to exchange keys
This is placing all the risk on the tenants side. So I see a property I like, then I have to pay the deposit and the handling fee, and then I will receive the owners details. Ok, let’s assume that I did all this. Now I want my contract a.s.a.p. right? WRONG. Every single contract is the result of negotiations between the tenant and the owner.

There are millions of reasons why both parties can’t come to an agreement and why you should never sign a contract without these prior negotiations:
• The furniture is outdated and the owner refuses to change it
• There is no internet connection
• Pets are not allowed
• My income isn’t high enough to afford the rent
• My freelance job certificate isn’t accepted
• I can think of millions more


4. Nestpick doesn’t screen tenants or house owners

In the real estate market, it’s paramount to check and screen both the tenant and the landlord to avoid scams, unwanted rental behaviour and loss of revenue.
Screening the owner:
• Is he actually the owner, and can he prove that he is, by providing the purchase contract of the house and a copy of his passport?
• Does he have permission from his bank, insurance company etc to rent out his house? (mandatory in the Netherlands )
• Are there any claims on the property from the bank? ( foreclosure threat )
• Is his property liberalised, so he can legally rent his property? (mandatory in the Netherlands )
• Is he known for his bad reputation on the local market?

Screening the tenant:
• Checking the passport or id-card
• Checking prior rental history and behaviour
• Checking work certificate and contract and verifying it with HR at his company?
• Is there a balance between the rent and the income (can they actually afford the place)
• If they are students, is there a co-signer of the lease like a parent.
• Bank statements over the last 2 years, proving a steady income

I can go on and on, but fact of the matter is, it’s not just connecting two parties that justify charging 25% over one months rent, but it’s bringing validity and trust to the transaction and that’s where Nestpick will always lose it from the certified rental agents. Their lack of customer care and nurturing will actually help estate agents in their pitch to their prospected house owners, who have actually been struggling to pay their mortgage for some 25 years to buy the house. Dear sir, would you really trust your property in the hands of a one trick pony like Nestpick?


5. Their cancellation policy sucks.

If you cancel before the booking is confirmed by the landlord, you forfeit 50% of the booking fee, but will receive back the rest plus the deposit.
If you cancel more than 2 months before moving into the property, you will receive back the deposit amount but forfeit 100% of your booking fee.
If you cancel between 1-2 months before you move in, you forfeit the booking fee plus 50% of the deposit.
If you cancel under 1 month before moving in or do not show up to claim the apartment on the agreed dates, you forfeit the entire amount.
Need I say more? So if for what ever reason I have to cancel, I will always lose ( a part of ) my handling fee that I have paid. Seriously, this is just sad. They show no interest in the personal and emotional mindset of the tenant, and it seems that it’s all about the money. And no, naming your customer service your Happiness Team will not change my mind.

A word of advice to both tenants and house owners. Get your own realtor and make them guard your interests on your behalf. Getting a two nights bedroom through Airbnb is easy, but with renting a property for one or more years, there are just so many pitfalls for both parties; don’t leave it up to yet another Get Rich Quick ( we are the next big thing since cookies) startup.

Happy days,
Richard Oerlemans
Eday Housing Service