The owner of a Donegal hostel for sale at €800,000 is offering an interest-free mortgage to a buyer who can come up with half the price
THEY SAY charity begins at home. After the collapse of the mortgage market one Donegal-based man is hoping to jump start the sale of his home and business with an offer of a no-interest “mortgage” that he says is Christian in origin.
“I will give a 20-year, no-interest mortgage to the right person, who can come up with a deposit of 50 per cent of the purchase price,” says Brendan Rohan, owner of The Mill House at Corcreggan.
The property, some 678sq m (7,300sq ft) in size, first came to market in May 2008, asking €1.2 million through local agent Charlie Robinson. Eighteen months later the price has been reduced by 33 per cent to €800,000.
Rohan has come up with a new sales angle that requires a 50 per cent deposit, €400,000, to be paid upfront with the remaining half of the asking price paid to him on a monthly basis over the next 20 years. This payment of €1,667 per month is what’s being offered on an interest-free basis.
Once the deposit is paid the buyer “gets the deeds to the building”, Rohan explains. “My name is a registered charge against the building.”
He adds: “Like the banks, I’m not interested in giving anyone a 100 per cent mortgage. What I am looking for is a 50 per cent deposit. I’m not a banker, and, for ethical reasons I will not charge interest on the loan, but I can create a mortgage document for the new owner as any lender does.” Terms and conditions have yet to be drawn up by a solicitor, says Rohan.
So what’s on offer? The 10-bedroom stone-fronted property, operating as a hostel, has a catering kitchen, diningroom, self-contained one-bedroom apartment and a conference room. There is a large open-plan attic space around 1,115sq m (12,000sq ft) in size. The Mill House is on approximately one acre of land and comes with an organic garden as well as front and rear car-parks with room for 26 vehicles.
This plot is on a larger five-acre site already owned by Rohan. There are several other buildings on this larger site, including a one-storey cottage that is Rohan’s home, a derelict mill complete with wheel, a reconstructed railway station and a former kiln house that is not in use. There is also planning permission for three cottages, as well as planning permission for another one-off house, which Rohan hopes to start building work on, once he receives the €400,000 deposit from the sale of the Mill House.
Rohan hopes to sell all but the yet-to-be-built property within the next year. The Mill House buyer will be offered “first call” on these sales.
Rohan estimates that the Mill House Hostel generates €80,000 per annum. Business is up over 16 per cent on the year previous to June 2008, he says.
The setting is adjacent to scenic New Lake, with views of Tory Island. The property is located about two miles outside the town of Dunfanaghy, which, local estate agent Robinson says is back in business as a tourist hotspot, after faltering over the last three or four years.
Since the Mill House is operating as a business, any buyers considering changing its use into a private home will be subject to VAT at 13.5 per cent.
John King, principal at King Solicitors, which specialises in property law, says there is no reason why the purchaser can’t borrow from the vendor.
“There’s no reason in the world why he can’t do this. But one should be well advised before entering into such a contract. The person borrowing would want to see the mortgage deeds from the very outset.”
www.robinson.ie
