Are you thinking of investing in Real estate? Before you go on to actually make the investment, there are few essential real estate’s terms you should be aware of it. Real estate can be a profitable venture, but it can be complex and filled with jargon. And understanding these 13 real estate terms you must know before investing:

Appreciation: It has to increase in the value of the property over certain period of time. These can be influenced by the various factors including, demand for the property, location, builders and economic growth in the area.

Return onInvestment (ROI): ROI measures the profitability of investment. It is a calculated by dividing the net profit from an initial investment cost. This is the net amount of cash earned monthly off a property after deducting the operating costs.

ROI = Net Income/Cost of investment

Cap Rate (Capitalization rate): As a real estate investor, Capitalization rate is one of the most real estate terms you familiar with. It’s calculated by dividing the property's net operating income by its present market value. A greater cap rate might suggest a more attractive investment.

Homeowners Association (HOA): This is an organisation for homeowners for apartments enclaves or subdivision is a responsible for enforcing the rules and collects the fees to maintain common areas and amenities.

Trunkey Property: It is a home or apartment that is nearing to completion or is that very close to getting ready for moving. The generally property have a high demand among the investors as they can buy and start renting it out without waiting for so long. Another benefit for Trunkey
property buyers can directly see the home and access the quality, and before related to purchasing it.

Built up area: The entire area of home and includes carpet area, wall thickness and balcony area. The built area is carpet area and the area is covered by wall put together. The built-up area of a property is a usually 1-15 percent more than the carpet area, we are taking into the account covered by the walls of the property.

Super built area: This common area may include areas may covered by the entrance of the property, lobby, parking and more, as well as the common area of the property. And these is the area of home, including the carpet area wall thickness, and common areas like lift, corridors and lobbies.

Carpet Area: This is the net usable area of property or floor area, i.e., the total area of property of you can put to full, substantial use within a property. As well, excluding that covered by external walls and Balconies.

Power of attorney (POA): This is one ofthe real estate terms you should know, especially in order to avoid fraud. For NRIs, power of attorney was commonly used to transfer ownership of their property by appointing a representative in their place. A power of attorney appoints this representative.

Credit score: It is also known as the CIBIL score,this is a measure of the ability of an individual to repay a loan. This is a three-digit number which is calculated by bank and financial organisations to evaluate an applicant before disbursing a loan, which ranges from 300 to 900.

Basic sale price (BSP) or Market Value (MV): The Basic Selling Price (BSP) or Market Value (MV) is the price per square foot at which a property is listed for sale by its owner. Additional charges such as Goods and Services Tax (GST), amenity charges, preferential location charges, and other maintenance fees are not included. The additional charges can, however, amount to 20% of the basic selling price.

Equal monthly instalment (EMI): This is the monthly amount that the borrower of a home loan has a to pay lender. It is a applicable only for buyers who are availing for home loan to purchase a property. EMI is a calculated on the basis of various factors such as loan amount, loan tenure, salary, age, credit history and etc.

Floor space ratio/ Floor area ratio:A Floor Area Ratio (FAR) or Floor Space Ratio (FSR) represents the maximum floor area a building can have on a piece of land. The ratio between gross floor area and land area. This is the maximum floor space permitted through building construction.

If you have an any property related questions you can reach out to our advisors and we will be
happy to guide you.