Don't let your parking space go to waste
Charging motorists to park in your home's drive or garage can be lucrative. Chiara Cavaglieri reports
Sunday 14 November 2010
Ask any motorist in Britain what their biggest bugbear is and, after potholes and pouring rain, parking usually comes close to the top.
Anyone would think it was a great British hobby given the amount of time we spend doing it: according to a recent poll by parking company NCP, parking accounts for 152 hours of our time annually. But while Britain's roads become more congested, a new service is emerging that solves the problem of parking spaces while generating a lucrative second source of income.
More people with a garage or driveway to spare are renting the space to drivers looking for a hassle-free spot. With limited spaces and car parks charging through the roof, an unused parking space or garage is a precious commodity in busy cities.
Finding a tenant can be as simple as putting an advert in the local paper or on a listings website such as Gumtree.com, although many people find it easier to use one of the many websites exclusively dedicated to this revenue stream. It is free to list a spare parking spot or garage on Yourparkingspace.co.uk, for example, and Parkonmydrive.com charges £10 a year which is taken only once you've made a booking.
Other websites take commission on successful bookings, but the flip side of this is that you can expect more help with arranging bookings and drawing up contracts which set out the details of the arrangement. Parkatmyhouse.com, for example, takes 15 per cent in commission but offers professionally drafted contracts to download and a secure online PayPal payment system. Parklet.co.uk also takes a 15 per cent share plus a one-off administration fee of £25, but for this the company negotiates with tenants, sets up contracts and will collect payments on your behalf.
Ed Bowsher, the head of consumer finance at Lovemoney.com, says renting out a parking space can prove a valuable way of raising extra cash. "If your front drive is near a busy railway station, you might be able to charge £500 a year or more. Spaces near an airport or a sports stadium can be even more lucrative. Some drivers are prepared to pay £10 a day for these highly valued spots."
Charges aside, potential earnings will depend largely on the availability and demand for parking spaces in a given area, and how close the space is to transport links, sports or entertainment arenas. Average annual earnings for landlords based in Birmingham can be as much as £230 and more than double this in London, at £487, according to Parkatmyhouse.com.
But Anthony Eskinazi, the founder of Parkatmyhouse.com, says the best deals go to those who are prepared to do a bit of research. "Parking space owners can set their own prices, but it's worth checking that your rate is more competitive than nearby car parks or metered parking bays," he says. "If you have electronic gates and CCTV as well, you might be able to charge a bit more."
It also pays to be flexible. You may decide that you want to maximise potential earnings by letting your space every day and all year round, or you may want to let your space only on specific days. How easy it is to arrange this will depend on the site that you use. Parkatmyhouse.com allows its web visitors to let spaces by the day, week or month with as many restrictions as desired. By contrast, the website Parklet.co.uk allows consumers to let spaces on a five- or seven-day basis.
While the gains may be lucrative, they are not exempt from income tax, so it is crucial that full records be maintained showing how much money has been earned to be declared on tax returns.
Security is another issue to bear in mind and is often cited as one of the biggest concerns for prospective driveway landlords. It is wise to hold back from giving out an actual address until a booking has been confirmed and you have been given details of the make and model of the car. Parklet even issues tenants with special parking permits which must be displayed on the windscreen. Your home insurance could pose another problem so always speak to your insurer before you start advertising your space to make sure that your policy won't be invalidated.
It's important to have it stated in the contract that the tenant leaves their car at their own risk, as they would with a normal car park, and that they are liable for any damage caused to your property. You should also ensure that they hold third party car insurance so that they are liable for any accidental damage.
If renting out a parking space isn't an option, you can list anything from spare storage facilities to an unused garden instead on sites such as Spareground.com but, again, it's a good idea to draw up a simple contract outlining a few rules such as when they can use the space and how much you're going to charge.
Bee Arnold, 31, All Saints Church, Islington
Islington-based All Saints Church began renting 12 of its private parking spaces to motorists through Parkatmyhouse.com three years ago.
By March of this year, it had raised more than £50,000 from drivers eager to find a space without the hassle that goes parking in the capital.
The church currently charges £11 for half a day's parking and £22 for 24 hours with all the proceeds going towards helping fund local projects in the Islington community.
Bee Arnold, a new minister at the church, says it has been easy to find willing car owners to fill the spaces.
"It seems to work really well for everyone. It's easy for us to do and the car park is pretty full most of the time so there's definitely a need for it," says Ms Arnold.
Another likely factor in its success is the competitive rates the church charges. "I have been speaking to one person staying at a local hotel where the parking was expensive and in the congestion zone. Ours is half the price so they parked with us and just walked five minutes to get to the hotel," Ms Arnold added.
The church has made £68,270 since parking began in 2007, and this year alone it has made more than £20,000.
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