You don’t think that anyone would pay to have your life? You might be surprised. One trend that has arisen from the financial crisis is a burgeoning rental sector, and you may well be able to cash in on assets that you only use part of the time.
So whether you have a driveway, a spare room, a car or simply some money in the bank earning a poor rate of interest, you could make £500 a month or more with little discomfort to yourself. Follow our guide to see who might rent your life, and how much they might pay.
Take in a lodger
Canny home owners should be using their houses as money-spinners, and the most common way is to take in a lodger. The number of people doing this has shot up, with the flat-sharing site easyroommate.co.uk reporting a 17 per cent increase this year.
You can earn up to £4,250 tax-free from renting out a room under the Government’s Rent a Room scheme. The average rent for a room in the UK hovers close to this figure, at £348 a month. However, the £4,250 threshold hasn’t changed since 1997, and the charity Shelter, together with website spareroom.co.uk, is campaigning for it to be lifted to £9,000.
Even if this doesn’t happen soon, the amount of money you could make is still worthwhile, particularly in London, where the average annual rent for a room is £7,176. If you don’t want your lodger around at the weekends, you could consider advertising on a site such as mondaytofriday.com, which allows you to rent your room to commuters and then have the house to yourself at weekends.
If you do want to rent out a room, it’s important to agree ground rules first. If you do not own the home, or you own a leasehold property, you will need to check whether your lease allows you to take in a lodger. If you have a mortgage, check with your lender. You’ll also need to check your home insurance.
It makes sense to vet potential lodgers carefully, and draw up a proper rental agreement. Check the legal ramifications. If you have any more than two lodgers, your house will become a House of Multiple Occupation (HMO) which entails lots of expensive requirements.
You have a standard Duty of Care towards your lodger with regard to health and safety, so make sure you have gas safety checks, and that your furniture meets required safety standards. You can buy standard lodger agreements from companies such as lawpack.co.uk or legalhelpers.co.uk. Find out more about the financial and tax implications at direct.gov.uk.
Steve Hilton, spokesman for the National Landlords Association, who has taken in lodgers himself for the past three years, says a lot of the issues that may come up are common sense. "People think that their lodger will stay in their room and you unlock them in the morning, but of course that is not what happens," he said.
"You need to do as many checks as possible. Above all check that you are ready to have a lodger, check that you are comfortable giving up a shelf in your fridge and space in your kitchen. Make sure they are the sort of person you would like to sit down and watch EastEnders with."
- You could make: an average of £348 a month
Rent out your sofa
Don’t have a room to let? Even if you use your spare room yourself, or only have a sofa bed in the lounge, you can still make some cash. A website called Crashpadder will allow you to list your sofa bed, spare room or even your floor to paying guests.
You’ll be able to check feedback on the guest before deciding whether you want them to stay, and are free to decline the booking if you don’t like the look of them. The use of credit cards allows the site to check on identities before a guest shows up at your door.
At present you could stay in central Edinburgh for the festival for £60 a night via crashpadder.com, or spend the night on a floor in Putney, south west London, for £8.
- You could make: an easy £100 a month if you live in a popular location
Get the TV crews in
Even the most ordinary properties can be used in films or advertisements in order to make extra income. You need to be ready for several visits from companies before the filming starts, and a certain amount of mess and disruption. Rewards can easily go into four figures, however. If you want to register your property, try the agencies locationpartnership.com or locationworks.com. They will advise you on whether your property is suitable.
- You could make: thousands of pounds (sporadically)
Your car
Do you use your car all the time? If not, it could be making you money thanks to a new service. Whipcar only launched in April, but one car owner has already made £1,000 by renting her car out while she is away on business trips.
The site allows you to list your vehicle and also provides specialist insurance that covers the car while it is being driven by someone else. The site started in London, but there are now cars in locations throughout Britain.
"There have been a few minor incidents with scratches and wing mirrors being scraped, but they have been sorted quickly by insurance and the car owners have chosen to continue with Whipcar," says founder Vinay Gupta. The site plans to have 1,000 cars registered within six months of its launch, and it already has 600.
You can rent out your car – by the hour or for longer periods – to drivers over 21 with clean licences. The company also encourages eBay-style feedback from drivers, so you know who you are dealing with. Mr Gupta says that many car owners find they get repeat business from the same drivers, thus building up the relationship.
The amount you’d make hiring your car out depends on the make and location. At present, a VW Polo in Edinburgh is being hired out for £30 a day, while a Ford Fiesta Finesse in London is going for
£21 a day.
- You could make: £100 for four days of car hire a month
Your money
If your savings are earning you little or no interest, you can make more by lending them to the general public with Zopa. The website allows you to earn an average of 8.2 per cent (before bad debt) by lending to ordinary people. The money is spread across borrowers to share the risk. If you lend £500 or more, your money is spread across at least 50 borrowers.
If borrowers don’t pay it back, Zopa uses a debt collection agency, and it gives you an estimate of the bad debt you are likely to experience. You can choose a risk profile for the people you are lending to, with both the estimated bad debt and the interest rate rising along with the risk.
For example, if you lend to top rate A* borrowers you would expect a default rate of about 0.4 per cent and an interest rate of about 6.8 per cent after fees, but if you lend to C-rate borrowers they might default at 5 per cent, but you could attract interest rates of about 10.5 per cent after fees.
It is important for lenders to understand that there is no statutory safety net to protect their money. While the Government-backed Financial Services Compensation Scheme (FSCS) guarantees deposits in authorised banks or building societies up to £50,000 per person, Zopa is not covered.
The company might also underestimate the number of people who may default on a loan, and therefore you might not get all your money back.
You pay a fee of 1 per cent on the amount you lend to borrowers using the site, and you will need to pay tax on your earnings.
- You could make: around £66 a month, based on lending £10,000 of savings
Your driveway
If you have designated parking that you aren’t using, you could make up to £300 a month by renting it out.
Websites such as parkatmyhouse.com or yourparkingspace.co.uk allow you to list your space for free. Commuters will pay about £75 a month to hire a space near a train station, while those living near football stadiums and concert venues could make money when events are on.
Spaces near airports are also popular, but do check the deeds of your house or flat first, since you may be forbidden from profiting from airport parking.
- You could make: varies a lot – between £50 and £300 a month
