15 Real Estate Terms That You Must Be Familiar With

Real estate investment can present exciting opportunities, but the multitude of industry-specific terms & jargon can be exciting & overwhelming.

Hence, we’ve compiled a list of real estate terminologies with their meanings to help you start your investment journey on the right foot.


A type of loan that is taken to finance a property acquisition. In India, to be eligible for a mortgage, you need to have a good credit score & CIBIL score & you must meet certain criteria set by public & private banks. The interest rate on the loan is determined by a range of factors including your, income & other variables.

Off-Plan Property Investment:

Off-plan property investment is an investment made when the property is in the planning or development phase. Investors who are interested in making an off-plan investment consider the property’s location & plan/layout among other numerous factors to make a decision. Off-plan property investors are called early birds. They enjoy the satisfaction of purchasing the property at a discounted price.

Freehold property

A property whose title has been completely transferred to the buyer through a sale deed with no restrictions on his/her right to sell or transfer the said property to another person is called a Freehold Property. The owner of a freehold property has complete ownership of the land and the building mentioned in the official document.

Carpet Area

Carpet Area refers to the enclosed space within the internal and external walls of the house which can be carpeted. What it means is it’s the net usable area of a property, i.e., the total area that you can put to full, substantial use within a property. The carpet area often usually makes up 70% of the built-up area. It’s important to remember that the carpet area doesn’t include the space used by walls, yet it considers the area stretching across your private terrace and balcony.
The carpet area can be calculated by a simple formula.
Carpet Area = (area of bedroom + living room + kitchen + balconies + toilets) – the thickness of the inner walls.

Built-up Area:

Also known as the plinth area, it represents the square inch of the house from the internal and external walls to the carpet area, including the terrace and balcony. It is usually 20-30 percent more than the carpet area.

Super Built-Up Area:

Super Built-Up Area covers the built-up area and common areas of the building, like lifts, staircases, corridors, and lobbies, divided proportionately between all the flats within the building. Developers often charge consumers depending on the size of this area to recoup their building costs, which is why it’s also known as the “saleable” area. You can calculate the super built-up area by this simple formula:
Built-up area + proportional common area = super built-up area.

Floor Space Index (FAI):

Also known as Floor Area Ratio (FAR), it’s the exact proportion between the built-up area and the available plot area allotted by the government for the structure. Remember, if the FSI is high, the build-up area can also be larger. FSI is also an indicator of a location’s appeal and its population density too.
The FSI is usually set according to the National Building Code of India (responsible for providing guidelines for building construction activities across the country) and is regulated by the municipal or local authorities from the state government.

Certificate of occupancy –

This is an essential document issued only by the local municipal corporation to the house owner after ensuring the construction has complied with all permissible construction plans and local laws.

Allotment Letter –

This is a letter the property developer gives to the buyer allotting a specific piece of land or apartment unit to the buyer, which could only then be used for development or construction.

Stamp Duty:

A government tax is payable under Section 3 of the Indian Stamp Act, 1899. In the case of property transactions, the stamp duty is charged as a percentage of either the transaction value or the minimum price of property determined by the government, known as the circle rate, whichever is deemed higher. In Hyderabad, buyers have to pay a flat 4% of the property’s value as stamp duty irrespective of buyers’ gender.

Registration fee:

The registration fee is a processing fee charged by the State government to register a document with the registrar, the document being an agreement or proof of property transaction between two or more parties.
The stand registration charge in most Indian cities is one percent of the property value. In Hyderabad, registration fee is charged at 0.5% of the property value. (across municipalities, corporations and other areas for apartments, and flats)

Stilt Parking:

Stilt Parking, or uncovered car parking, is a partially covered parking area on the ground floor of an apartment building. In housing societies where space is constrained, the ground floor provides the parking space when an eight-ft-high foundation is built that acts as the base structure for the entire building while giving the residents a partially covered parking space.
As stilt parking is not considered when determining the vertical growth limit of an apartment building, it gives the developer the option to build additional floors that are permitted without stilt parking.

Asking Price:

It’s the price advertised by the owner, which may not always be the actual selling price. There’s always room for negotiation when a property is listed with an asking price.

Bayana (Token Amount)

An Indian term denoting the token money given to the landlord to informally freeze negotiations on a particular property after the initial terms and conditions have been formalized verbally or contractually.


ROI stands for Return on Investment. It is used to measure performance and evaluate the profitability and efficiency of an investment. An easy way of calculating ROI is by subtracting the investment’s initial value from the investment’s final value, which equals the net return.

We hope that with a basic understanding of the terms mentioned above, you will be better equipped to navigate through the ROI-rich investment environment of the real estate industry. If you’re starting out and are unsure which city to choose or what project suits you best, check out our blog section to learn about the benefits of investing in residential projects in Hyderabad .

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