Real estate investment is quickly becoming the most favorite form of investment for Indian families. In today’s times, where everything is so unpredictable, one should plan wisely for themselves and their families. There are a plethora of options to invest in the market. One needs to carefully assess and get information about the varied options. A venture which has approvals from either HMDA or DTCP is the safest bet as compared to others. We should not fall into the trap of builders trying to convince otherwise.
1. If you are keen to invest in Real Estate, here are a few terms which you should be well-versed with. This will make the whole process easier to understand too!
2. Return on Investment (ROI) – ROI measures the money or profit that you make on the Investment as a percentage of the cost. If you buy a property worth Rs.15,00,000 and sell it for Rs.20,00,000, your profit is Rs.5,00,000. The profit is half of your Investment, and hence your ROI would be 50%.
3.Amenities – Every project has features that enhance its attractiveness and increase the occupant’s satisfaction. Eg, well built roads, avenue plantation, children play area, underground drainage system, water facility to each plot etc.
4. Appreciation- An increase in the value of a property due to changes in market conditions, increase in supply and demand and also because land is a limited resource. It’s directly proportional to the population. As the population increases, the demand for land also increases.
5. Bayana (Token Amount) – An Indian term used to denote the token money given to the landlord to informally freeze negotiations on a particular property, after the initial terms and conditions have been formalized.
6. Broker/ Dealer- A broker is a person or a company who acts as an agent, and brings two parties together to strike a deal. After the deal is finalized, the broker has to be paid a fee by the parties.
7. Buy Back Offer- When a builder intends to buy back the property after a fixed period at a predetermined appreciated rate, it is known as buy back offer. Usually, the builder offers an assured return of a pre-decided percentage to the investor for the buy back period. This may usually take place two to five years after the booking was done by the buyer.
8. CIBIL – Credit Information Bureau (India) Limited (CIBIL) is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards.
9. RERA – The Real Estate (Regulation and Development) Act, 2016 (RERA) is an Act of the Parliament of India which seeks to protect the rights of Real Estate buyers as well as help boost investments in the Real Estate Industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.
10. Downpayment – The initial payment done by the buyer to the builder for which is a portion of the total price of the land. There is no loan applicable on this as this is done as the first payment.
11. EMI Equated Monthly Installment (EMI) – It is a fixed payment amount made by the borrower to the lender at a specified date each month. Equated monthly installments are used to pay off both interest and principal each month, so that over a specified number of pre-decided years, the loan is fully paid off by the borrower.
12. Landlord – A landlord is the owner of a house, apartment, condominium, land or real estate which is rented or leased to an individual or business, who is called a tenant.
Property Insurance- Property insurance provides protection against most risks to property, such as fire, theft, weather damage etc. This includes specialized forms of insurance such as fire insurance, flood insurance etc.
13. Seller’s Market – A seller’s market is when demand for property is greater than the supply. The result is greater opportunities for owners who may find someone willing to offer the asking price or even a figure greater than the asking price.
Now that you have information about the basic Real Estate terms, it would be easy for you to understand these terms if you are absolutely new to investing in Real Estate.
Dhruva Projects provides a great and rewarding investment option to the ones looking out to plow their money in safe and secured options. Open plots bring with a lot of flexibility & ease of possessing the property.