A. The Breeding Cage.
The cockatiel is an eager breeder and is capable of breeding even in standard twin cages (17in. x 30in.). Now that is NOT recommended. Exercise and space for mobility is very important since a new batch is coming forth and they need space to fly about and test their wings. Bigger is better but a flight cage of 2ft. x 3ft. x 4ft. would be ideal. With this size, you can place the nest box higher giving the pair a safer ambiance, this may save you a lot of chicks that may fall victim to night frights.
B. The Nest Box.
The standard nest box is 1ft. x 1ft. x 1ft made of wood(preferably light and durable like "Palo Chino", used on crate boxes). The hole should have a diameter of 2.5-3 inches. The nestbox floor can be lined with nesting material usually hay, shaved wood or shredded paper to contain heat on the eggs and avoid rolling. The nest box size is large enough to accommodate both parents as they usually tend to the young simultaneously. It is also capable of holding 4-5 chicks. Once set-up it is best to leave the nest untouched unless emergencies(like mite infestation, chick death) call for major attention, thus it is a must to have a side door to peek on a daily basis.
c. Perches.
Provide enough perches near the nestbox hole as wandering chicks will jump out and need some branches to hold on to. Extra precaution must be made as common injuries occur on direct fall the first time they jump out of the hole, also provide some cushioning on the floor like hay directly beneath the nest box.