I choose a basic wooden nesting Box for my rainbow lorikeets. They love it, in fact they have adopted it for use beyond the breeding - they love to sleep in it overnight. I hear it is a good idea to let the lorikeets choose from several nesting options but the loved the first one from day one so I never did offer several options.
Make sure the nesting box is well away from branches (because of mice and other pests) and while well off the ground you do not want it tucked up right to the roof - particularly if you keep your rainbow lorikeets in an outside aviary like I do. You don't want the full heat of the corrugated roof to go into the nesting box and they do tend to breed in spring to summer, which for Australia means the rainbow lorikeet breeding season is from August to December. However in captivity rainbow lorikeets often choose to breed all year round and start at about 2 years of age. The most difficult aspect of breeding seems to really be sure you have a male and a female bird - consult your vet.
You want the offered nesting box or hollow log to be in Lorikeet size: The Entrance hole should be about 6cm in diameter with a landing perch outside and inside the box for easy access for your rainbow lorikeets.
The rainbow lorikeets need about a 20cm by 20cm by 20cm space to breed comfortably. Too big is not good either and may be rejected as a breeding option. The female incubates the eggs but both parents will feed the (usually 2) chicks. Use wood chips, dry grass or sawdust in the nesting box. I put some of each in and they will spend the rest of the day throwing out what they don't want.
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