7 Things to know before Buying Property in India

Home a place where all want to go after a tiring day at work but many people are still not able to find a perfect home for them and are still paying their hard earned money to rent so here we are to give you answers to your questions and give you tips about what you should learn before buying home.

Are you a newbie in real estate investing? Who wants to invest in properties in Mumbai, Want to find out about the foremost common terminologies employed by real estate marketers? Gharjunction.com is happy to help you with this. Whether you're getting to make your first property investment or getting to diversify your investment portfolio, there are many common acronyms and jargons that you simply got to know beforehand. Therefore the next time you hear a word like ROI, EMI or FSI you'd know what it means and its significance.

As a beginner, it's not practical to find out all the terms at one go, but you'll get conversant in a couple of common ones here. We've compiled an inventory of 7 common real estate terms every real estate marketer or investor should know.

1. ROI (RETURN ON INVESTMENT):

When you invest in something whether it be by investing time or money we all expect something in return in the form of profit same goes with the real estate when you invest in real estate we expect to get some profits from it, that’s why we look for return on investment. The greater the ROI the greater the profit, ROI is calculated by dividing the net profit by the total cost of investment done in the property.

2. BSP (BASIC SALE PRICE) / MV (MARKET VALUE):

Basic Sale Price or Market Value is the base value by per sq. ft. which the property is listed by the BSP or MV does not includes additional charges like amenity charges, favoured location charges, other maintenance fees and taxes like GST (Goods and Services Tax). These additional charges can come up to 20% of the BSP.

3. CASH FLOW:

Cash flow refers to total amount of money you earn monthly from a property after deducting all the operating costs. It is the net difference between money coming and going out from your asset. When your income is beyond your expenses, then your investment is profitable and maintains a positive income or cash flow. But if your expenses are beyond your income, it's termed as negative income or cash flow. Ideally, an investor should choose a rental property which maintains a positive income or cash flow.

4. HOMEOWNER’S ASSOCIATION (HOA):

Homeowner’s Association may be a self-governing organization comprising a group of house owners during a particular subdivision, apartment or planned housing community. HOA is eligible to enforce rules for maintaining the properties in great condition and also collect monthly maintenance fees from the owners. Once you buy a property within a definite HOA, you'll become a member of the association and can be prone to pay the HOA charges required for the routine maintenance of the property.

5. EQUAL MONTHLY INSTALLMENT (EMI):

Equal Monthly Installment (EMI) is that the monthly amount that a loan borrower has obligated to pay to the lender. EMI is applicable for buyers who are availing a home loan to get a property. EMI is calculated on the idea of varied factors just like the loan amount, loan tenure, salary, age, credit history, etc. Most of the banks and financial institutions offer home loans to aspiring buyers. You’ll make use of a web/online home loan EMI calculator to calculate your EMI grounded the principal loan amount, loan tenure and rate of interest.

6. BUILT UP AREA:

Built-up area refers to the whole floor area of the house or apartment, including the carpet area, internal & external wall thickness and balcony area. In India, up to 30% of the space of an apartment are going to be build inner walls and balcony spaces. As an example, if the built-up area of a home is 1000 square foot, the carpet area won't be over 700 square foot. Therefore the built-up area is that the actual area which will be employed by the house buyer.

7. CARPET AREA:

According to the Real Estate regulatory agency (RERA), Carpet area is that the net usable floor area of an apartment excluding the part covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the part covered by the interior partition walls of the apartment. In other words, carpet area is that the area which will be covered by a carpet or the area of the apartment excluding the thickness of inner walls.

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