Renting out a room or even listing your home with a location agency are two tried and tested methods, but how many homeowners realise the potential of their parking space or driveway?
With growing numbers of us commuting to work, parking is much in demand and canny owners are turning their parking spaces into cash. Letting agent Park Let (
www.parklet.co.uk) has 21,000 recession-savvy landlords on its books who earn an average monthly rental income of £120, a fee that rises steeply in towns and cities where there is serious pressure on the parking infrastructure.
Unsurprisingly, Londoners are the most prolific driveway landlords, with nearly 20 times more people in the capital letting their driveway, garage or allocated parking space compared to people in Manchester, the next most profitable city. One lucky homeowner in Pimlico nets £597 per month for their space, enough to pay a good chunk of a mortgage. Park Let's managing director, Luke Kelly, started the company in 2004 after years of commuting to the City from his native Chelmsford, where he faced steep rises in parking fees. "The recession has helped us, many more have signed up recently although some have cancelled as they've lost their jobs," says Kelly, adding that not all are homeowners.
Rental agreements typically forbid subletting, but landlords often turn a blind eye. When the economy recovers, Kelly believes that clients will continue turning unused space into cash.
"Even as we are starting to see green shoots in the economy, it's unlikely that a motorist will ever want to revert to paying the higher prices charged by major car park operators."
Student Chris Watt, 21, lives in an apartment his parents own in Kings Cross, north London. Along with renting rooms to fellow students, Chris maximises his income by letting his parking space. "At first I did it through Gumtree, but it's much easier to find people through Park Let." Netting £120 per month, which goes toward household expenses, Chris says that it's a hassle-free way of making money: "Doing it myself was stressful but this is much easier, the money gets paid straight into my account." He sees no drawbacks: "I've got a car which I keep in Bristol but here it's so easy to use London transport." The company charges fees of 15 per cent plus VAT but also runs a free service, Park Let Daily, for anyone living near large venues or stadiums, wanting to make money by renting their space for a few hours.
And, if giving up your car in exchange for an income from your parking space feels a bit drastic, short-term car rental service streetcar.co.uk might be the way to go. Now across most of London and locations including Brighton, Oxford and Kent, cars can be hired for as little as 30 minutes or as long as six months with the concept that another car – should you need one – won't be more than a 10-minute walk away.
Or for anyone who fancies earning cash from a lodger but who can't bear to give up their weekend privacy, weekday rental service mondaytofriday.com lets you do just that – and can earn you up to £4,250 tax free if they match you with someone who wants to live in your area during the week. London is the most popular spot but the nationwide service is growing thanks to demand from those looking to save time and money on commuting. Lodgers can register for free, while homeowners pay £29.95 for a three month listing.
Renting out your parking space or spare room helps cash-strapped city dwellers but the countryside is also brimming with entrepreneurs keen to earn an income from home. Research by insurance company NFU Mutual reveals that the recession has created a new breed of rural entrepreneurs as country dwellers tackle the downturn by setting up enterprises from their homes. Almost one in five rural households now run a business from their property and, in the last 18 months, 36 per cent of those surveyed had set up home-based businesses, with 32 per cent earning over £10,000 per annum and 6 per cent making over £50,000.
Following divorce and "a gap year that stretched into four" Liz Hawthorne, 51, started up her own spray-tanning business called Unreal, which she runs from her detached house in Wells, Somerset. Working from her conservatory in summer and a former bedroom turned office in winter, she has also built a "mini-lab" where she tests products above her garage: "In a recession it makes sense to keep your costs down. Having no office overheads is a no-brainer."
"The recession is causing everyone to diversify and I know a host of people running hairdressing, nail businesses,and beauty parlours from their homes, some have even converted their garages," says Hawthorne who holds meetings in a nearby café. As her business expands, she intends leasing extra space: "Many farmers have had to diversify and are turning old dairies into light industrial space. Large delivery vans can't come here so that's where I'll go when I need more space."
NFU Mutual's Tim Price was surprised by the sheer diversity of home-based businesses revealed in the survey; from traditional rural trades to firmly 21st-century commercial concerns such as web design and even letting your home as a wedding venue. Many rural Britons are also capitalising on the trend for "staycations" with one in 10 businesses running a B&B.
But, Price warns, transforming a home into a business is not without risk as valuable goods may be kept on site and visitors also present a potential hazard. Seeking advice from your local authority and insurance specialists is vital: "It can make the difference between a fledgling idea succeeding or not," warns Price adding that just one third of rural entrepreneurs have taken out public liability insurance and less than one in 10 has increased insurance cover.
And, if finding ways to squeeze cash from your home isn't enough, some homeowners are using their properties to fund an entire new lifestyle.
Roland Thompson, 37, paid for a two- and-a-half-year around the world trip by renting out his three-bedroomed house near Peckham station, south London (on sale through Wooster & Stock for £375,000). "Some people think that owning a house ties you down. However, my investment paid for me to explore beautiful countries such as Thailand, Bali, Cambodia and New Zealand. My property is a great earner in terms of rental yield," says Roland who has now moved to the Cotswolds where he's started up his own business.
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