- Dominique Raroha bought a duplex as a first buyer instead of a traditional house.
- Raroha, a 29-year-old who works in the insurance industry, thought she could collect rent while building equity.
- She lives in a place with her boyfriend and her tenant’s rent reduces her own monthly expenses.
This essay as told is based on a conversation with Dominique Raroha, a 29-year-old woman working in the insurance industry in Sicklerville, New Jersey, about 23 miles from Philadelphia, who purchased a duplex as her first home purchase . The conversation has been edited for length and clarity.
I do not regret my decision to buy a duplex.
Honestly, it seemed good to me. I always believe in starting with a good intuition, and from start to finish, throughout this entire buying process, I just had a good feeling.
Homeownership was one of my big goals. I’m the type of person who likes to take on a lot more responsibility, so I was excited and ready for this.
My great-grandfather purchased a large piece of real estate in Voorhees, New Jersey, and that real estate appreciated a lot over time. Over the years, property was sold, we built homes, and we were able to subdivide this property.
In total, I think this amount of real estate – which was once a dirt road and is now a major highway in South Jersey – must have been valued at a few million dollars.
Raroha bought a duplex as her first house. Courtesy of Dominique Raroha.
The United States is a capitalist society and real estate increases over time. This is how you build your retirement. This is how you create generational wealth. It gives you something to pass on to the next generation.
After purchasing my first property, I am already discussing with my lender the possibility of purchasing another.
Given the financial freedom of owning a duplex, purchasing another one makes perfect sense.
My Tenant’s $2,000 Monthly Rent Pays Most of My Mortgage
I looked at single family homes, condos – I was looking at all my options.
How I view money and my personal finances depends on what I can afford on a monthly basis. Is this purchase in my best interest?
I just wanted to maximize my investment.
The single family home I made an offer on was a very good sized home. The price was very good, which is why it made sense to offer this offer. For the condo I made an offer on, I would have paid less than $1,000 per month. But someone else already made a higher offer and it’s the same with the other place.
I submitted other offers. Many of them were not accepted because you are faced with a multiple offer situation. But the more offers I didn’t get, the better prepared I was for the next one.
When this house came on the market, I didn’t see it – I bought it sight unseen. That’s why working with the real estate agent that I did made such a difference because I was like, “Hey, this house, are you sure?” She said, “There are 15 other offers. You have to do the math. I don’t see you losing in this situation.”
My lender and I talked about it and worked out our offer number based on what I could afford on a monthly basis with the rental income. And to be honest, we could have gone higher and still made a decent investment.
The total area is approximately 2,400 m². My unit has two bedrooms and one bathroom – and I also have a private garage. The upstairs unit has three bedrooms and two bathrooms.
The Raroha garage which is being transformed into a “barcade”. Courtesy of Dominique Raroha.
I made an offer of $335,000, and it was appraised at $320,000, so I had to fill a gap in the appraisal.
My interest rate is 6.6%. I had it lowered because I had a credit score of almost 800 at the time of closing. If it were one point more, which corresponds to the average rate in effect, the cost would have been even higher.
The mortgage itself is about $2,900 a month, or more than $3,000. My upstairs tenant pays me $2,000 a month.
My boyfriend lives with me and he helps contribute. I’m not manufacturing he pays half my mortgage, but he does it. So we split half the difference.
Owning a duplex gives me many options for my next move
Before buying the duplex, I lived with my best friend, who had bought a house, and she rented me a room to help pay her mortgage. I paid him about $700. It was a great living situation because she knew all the time that I was looking for a house. So I didn’t think, “Oh my God, am I going to break a lease?”
It’s important to be proactive. You need to be present in this market, especially if you are a young buyer. Even if you don’t feel like you’re in good shape today, at least talking to a lender ahead of time will help you know where you need to be.
I started talking to my lender in June 2022. We were discussing different homes on the market, whether or not it would make sense, or if it would be a good investment. Then this house appeared, and it was very, very fast. But since I worked with him, he already had all my financial data on file. He had already prepared everything.
If I were to rent my place today — I think there is a similar place down the street, with the same layout and renting for $1,900 — then I would make a profit. So it is possible to make money in terms of income and building equity.
Raroha’s back patio. Courtesy of Dominique Raroha.
If you own a home, you own this house. If you build equity, the market doesn’t go down. I love owning a duplex in particular because I feel like it opens doors to more options. Do I want to buy a single-family home next? Do I want to buy another duplex?
You also benefit from tax deductions. I don’t think I see many people talking about it. I just filed my taxes and wrote off a lot of stuff.
To complete the purchase of a duplex in this market, it takes years of planning. Planning ahead definitely made purchasing this home much more satisfying and much more comfortable to purchase.
It won’t happen overnight, but it starts with planting the seeds. Even if in three years I buy another one, it would definitely be worth it.
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