One of the biggest complaints among people who live and work in London is the lack of parking. We all know that we should try to use public transport, but for many this is not always possible or practical.

When the closest free parking could be miles away from work, and the cost of using car parks or meters takes a large bite out of our incomes, it's not surprising that this adds to our daily stress levels.

However, a solution may be at hand, courtesy of the increasing number of homeowners looking to rent out a driveway or garage, and for a fraction of the price of public car parks.

People who leave for work early and return late, or who may have only one car but space for another, or who do not have a vehicle at all, are starting to discover the potential win-win situation for themselves and fellow motorists.

By renting out a parking space, you could typically earn £10 to £30 per week, perhaps even more. That's about £500 to £1,500 a year. In more popular areas, renting out a secure parking space could earn its owner more than £3,000.

However, the process of renting out a space is not as straightforward as simply putting an ad in the paper. Care should be taken to avoid legal pitfalls, security problems and other issues.

Here are some tips on how you can rent out your parking space successfully:

  • Decide exactly when the space will be available, and take into account any future changes in work patterns, for example, a change in hours or a new job closer to home.
  • Consider the full potential of your parking space. Is it located near a train or Tube station, or is there a major sporting venue or special event close by? If so, demand for the space will be higher, so charge accordingly. There are many specialist parking and general property websites which list parking spaces, so study these to find out what other people are charging in your area.
  • As with any rental, always be sure there is a proper written contract between you and the person renting. Seeking a solicitor's advice should prevent complications later. Alternatively, a letting agent could act on your behalf and oversee the entire process. Check what services the agent offers to resolve any problems that arise, such as non-payment of rent.
  • When advertising, think safety first. Don't publish your exact address in your advertisement.
  • Interview each prospective renter first to be sure they are reliable, and try to check there are no mechanical problems with their car that could affect your property. You wouldn't want a nasty oil slick to form on your driveway.
  • Confirm the driver's car is insured, so they are covered against any damage they might cause to your property. Also, contact your home insurance company to see if you need to update your policy.
  • When you have chosen someone to rent the space, keep on good terms with them in case of unforeseen circumstances. For example, you may have a furniture delivery on a specific day, or you may be off work sick, so you may need to negiotiate a partial refund with the renter if they are unable to use the space.
  • As with any income, rental earnings from renting out space could be liable to tax. You may qualify for tax breaks, so check with the Inland Revenue or financial advisor.