6 Must Know Real Estate Terms For A Successful Investment Journey

 The real estate market has always spooked newcomers as they traverse the real estate jungle. Instead of easing challenges, realtors that are out to dupe and confuse buyers have been getting away with it. They take advantage of less informed buyers who can be coerced into taking a less than ideal deal. For most therefore, the foremost challenge is to equip themselves with the knowledge and bandwidth to converse intelligently. 

Developers like DLF and the DLF properties in Gurgaon are known for their excellent customer relations and trust. Buyers are more likely to opt for projects that they believe would not attempt to dupe or confuse them. Over the years, DLF has created its own segment of customers that have continuously preferred such developers over its competitors. 

Whether it is making your first investment or expanding your investment portfolio, knowing the terminology is a must. To make life a little easier, here are a few must know terms that will boost your confidence: 

1. ROI

Return on Investment or ROI refers to the profit that one can expect from their investment. By dividing the total profit by the total cost of investment, one can effortlessly calculate the ROI. While there are a number of factors that influence the Return on Investment, one is advised to not rely on just this aspect. ROI is one part of a bigger and more complex ecosystem of terminologies. 

2. BSP or MV 

Basic Sale Price or Market Value is the per sq. ft. base rate at which any property is listed at. This price is as the name suggests, a base price and does not include any of the interests, maintenance fees or location fees. Therefore one is to keep it in mind to not go by the BSP or the MV of any property. One should weigh in all additional costs before budgeting or calculating any possible ROI in the future. In most cases, these additional costs can come up to 15-20% of the BSP or MV. 

3. CF 

Cash flow is the net amount of money that one earns from any one property after the deduction of all operational expenses and interests. In simpler terms, it is the difference between the money that is coming in compared to the outflow of money. Maintaining a positive Cash Flow essentially means that the inflow of money is higher or more than the expenses one makes on a property. Similarly, the inverse of this will result in negative Cash Flow and prove to be highly detrimental. 

4. Appreciation 

Like the word suggests, appreciation refers to the increase in the price of the property over a period of time. Factors that influence this are location, neighborhood, demand of the property and/or inflation. While there are more factors that influence this aspect, the above pointers are some of the key ones. Properties that are located in not so developed areas have a higher chance of higher appreciation. This is because of the fact that in a few years, the property will be significantly higher in price and most likely demand. Development of nearby areas plays a huge role in determining this aspect. Moreover, houses that provide scenic views such as that of nature, the city or even empty open spaces are expected to have higher appreciation rates. Houses like these are always in demand and with no dearth of buyers, they are an all time favorite investment option. Many of the DLF properties in Gurgaon are located at key points of the city and are undoubtedly high up on the appreciation scale. 

5. Turnkey houses/property: 

These types of properties by definition are nearing completion or are ready to move in. They are popular with investors because the amount of money required in renovations is very minimal. Investors can also very easily acquire the property, add certain finishes and sell it off again in the market for a higher rate of return. Since the house is ready to move in, investors can easily quantify the condition of the house. This saves them time, money and the need to wait for the project to finish completion. 

6. EMI 

Equal Monthly Installment (EMI) is a fixed amount of money that the person who has availed the loan is due to pay to the issuer. Various factors such as loan amount, interest rate and loan tenure influence the EMI amount. For many, it eases the process of purchasing their dream homes and living the life they have envisioned for themselves. 

These terms are a must know and definitely distinguish an informed buyer from an uninformed one. In any deal negotiation, knowledge lends the buyer power over the seller and brings conversation to a levelled playing field. Although the list of terms is enormous, beginning one’s investment journey with these is sufficient. DLF housing has enabled many newcomers to accomplish what they intended to.