15+ Real Estate Terms That You Should Know About

Buying your first property but getting confused about the related jargon? You’re not alone!

When agents throw around terms like "Carpet Area", "Super Built Area”, or “Loading Factor," most buyers just smile and nod while secretly wondering what these measurements actually mean.

Understanding these terms isn't just about sounding like a real estate Chanakya; it’ll also directly impact your wallet.

Below, we’ve deciphered some of the most commonly used terms along with their formulae. And guess what? No real estate degree is required!

Let’s begin…

Carpet Area

This is the real, usable space measured from the inner faces of walls, where you can actually place furniture and live. That "1200 sqft" apartment? It might have only 850 sqft of carpet area!

Since the introduction of RERA, developers have to disclose this measurement upfront, making it your best friend when comparing properties.

Carpet Area = Sum of all usable floor areas in the apartment (excluding walls & balcony)

Usable Area

Think of the usable area as "carpet area plus". This is your actual living area, plus functional areas like kitchens, bathrooms, and storage closets.

Have you ever walked into a 900 sqft apartment that felt bigger than a usual 1000 sqft one? That's a smart, usable area design!

It's not just about square footage; rather, it's about how efficiently those square feet serve you in your everyday life!

Usable Area = Carpet Area + Balcony Area + Utility Area

Covered Area

So, if there is a carpet area, there is also a covered area that keeps you dry when it rains. The covered area includes the carpet area plus all the internal walls, partitions, and anything under a roof.

However, properties with too much covered area devoted to walls and corridors mean less actual living space for your money. It’s more like paying for the crust when you really want is the pizza!

Covered Area = Carpet Area + Wall Thickness + Covered Balcony Area

Saleable Area / Super Built-up Area / Super Area

Mostly, this is what appears in advertisements: your carpet area plus walls, balconies, and a proportion of all common facilities such as lobbies, staircases, and a fancy clubhouse.

The super built-up area can be 25-50% larger than the usual carpet area, and that really impacts what you’ll pay per usable square foot!

Super Built-up Area = Built-up Area + Proportionate Common Area

Loading Factor

It's the percentage difference between carpet area and super built-up area. A loading factor of 35% means that you are paying for 35% extra space than what you are actually using.

A smart buyer will hunt for lower loading factors (20-25%); unless those high-end amenities truly enhance their living experience!

Loading % (Depending on developer) = [(Super Built-up Area - Carpet Area) / Carpet Area] × 100

Plot Area

It is the total land area on which the construction stands. In the case of apartments, you'd get an undivided share of this land.

Land value tends to appreciate more quickly than a building, so location is immensely crucial when investing in property.

A smaller apartment in a prime location tends to be more rewarding in the long run than a larger one in a distant suburb.

Built-up Area

This real estate term is actually your carpet area, plus the thickness of all internal and external walls. Usually, this area is 10-15% more than the carpet area.

The built-up area helps to understand the amount of space taken up by walls versus the actual living area—older buildings often have thicker walls, reducing usable space.

Built-up Area = Carpet Area + Wall Thickness + Balcony Area

RERA Carpet Area

The Real Estate Regulation Act (RERA) of 2016 has standardised the definition of carpet area to prevent buyers from misleading marketing.

According to this, the RERA Carpet Area does not include external walls, service shafts, exclusive balconies, and terraces.

It’s better to check that your agreement mentions "RERA carpet area" to ensure its legality. If it doesn't, raise a red flag!

RERA Carpet Area = Net usable floor area (excluding external walls, balconies, terraces)

Floor Space Index (FSI) / Floor Area Ratio (FAR)

FSI, also known as the Floor Area Ratio (FAR), determines how much construction is permitted on a given plot. An FSI of 2.0 means that one can construct floor space up to twice the plot area.

Real estate properties with a higher FSI would command highly priced premiums as it allows developers to build more sellable units, which often means more densely packed developments.

Why should you care about this? Higher FSI usually means more amenities, but also means more crowded developments. It's the difference between a spacious garden complex and a concrete jungle with which you can high-five your neighbour through facing windows!

FSI or FAR = Total Built-up Area / Plot Area

Setback Area

It is the mandatory open space required between buildings and property boundaries. Good setbacks mean maximum light and ventilation.

When a real estate consultant boasts about "extra setbacks," it usually means that "we value quality of life over squeezing in more sellable area."

Open Area

Uncovered spaces like gardens, playgrounds, and swimming pools where you can see the sky. Most regulations require 15 to 25% open space, but premium developments offer much more.

If you have similar properties at comparable prices, the one with well-designed, ample open spaces will usually provide a better living experience. After all, the garden where your children will play deserves as much consideration as your kitchen layout!

Open Area = Total Plot Area - Total Built-up Area

Common Area

Easily accessible spaces for everyone, such as the lobbies, corridors, staircases, and amenities like gyms and swimming pools. You're paying for them through the loading factor and monthly maintenance. The quality of common areas often reflects how well a property will age and sustain its value.

Here’s a key fact: common areas speak a lot about the ageing of a property. Generous and well-maintained common areas indicate a development that will retain its value and charm. A grand entrance lobby is not solely intended for guests; it's an investment in your property’s value in the future.

Common Area = Super Built-up Area - Built-up Area

Undivided Share (UDS) 

It is the landholder’s proportional ownership stake in the land under a multi-unit development. Typically, apartments with higher UDS in proportion to their area are less densely populated, have superior amenities, and have stronger redevelopment rights.

It is also very important for future redevelopment rights. So, if in case your building is ever demolished, your compensation will be calculated on your UDS.

UDS = (Flat’s Super Built-up Area / Total Super Built-up Area of all units) × Total Land Area

Balcony & Terrace Areas

Remember how the world transformed during the lockdowns? Suddenly, balconies weren't just nice-to-have features—They were crucial sanity-saving spaces. Balconies are extensions, allowing natural ventilation and light and establishing a precious connection to the outside world.

Balcony must be disclosed separately under RERA and is typically valued at about 50% of the interior space rates. Terraces are generally large outdoor areas located on the top floors or created by building setbacks, giving a significant value appreciation than typical apartment prices, with penthouse terraces attracting an even higher premium.

Gross Floor Area (GFA)

GFA refers to the total developed area of any building with all enclosed areas, walls, stairwells, and mechanical rooms. It is used for regulatory approvals, development charges calculations, and building services design.

For commercial property evaluation, GFA determines the efficiency of the building through the ratio of Net Floor Area to GFA. Well-designed buildings are usually considered efficient at 75-85%. This metric indicates how effectively the building converts space into usable area.

GFA = Built-up Area of All Floors (including common spaces)

Net Floor Area

For office spaces, an occupant's Net Floor Area reflects the total space available and usable by that person, excluding the common spaces and structural elements. Commercial leasing should always be negotiated based on net floor area, not gross measurements.

Net Floor Area = GFA - Walls - Service shafts - Common Areas

Built-to-Suit Area

These sites are long-term leased to accommodate specific business requirements. Typical uses involve certain specialised operations, such as healthcare facilities or data centres. The premium price usually comes with the comfort of knowing every square foot is optimised for your specific operations.

Plinth Area

Simply, the built-up area is measured slightly above ground level, which is essentially the building footprint. It is considered for municipal approvals, planning construction, and sometimes calculating property taxes. For individual homeowners, it is important to understand the plinth area while planning extensions or renovations.

Plinth Area = Built-up Area on Ground Floor (including walls)

Find Your Perfect Property With Us!

Remember, in real estate, what you don't know can cost you, not just money but years spent living in a space that doesn't quite meet your needs. With these terms decoded, you're ready to find not just a property but a true home. 

Do you want more details on these terms? Contact India’s most trusted real estate consultants for their guidance on each one. Your real estate knowledge is now your most powerful weapon in the negotiating arena!

FAQs:

Q. What does Carpet Area mean in real estate?

A. The Carpet Area is the actual space available for use in an apartment, except for the walls and balconies.

Q. What does Super Built-up Area signify in property listings?

A. The Super Built-up Area combines all the space you will use in your apartment. This consists of only the built-up space of the apartment and a share of common areas like the lobbies, corridors and amenities. 

Q. How to find the Loading Factor in real estate?

A. Loading Factor (Depending on the developer) = [(Super Built-up Area - Carpet Area) / Carpet Area] × 100; this real estate term indicates how much you end up paying for the extra space than what you are actually using.

Q. What exactly is the Floor Space Index (FSI) or Floor Area Ratio (FAR)?

A. FSI or FAR is the limit within the permissible construction area based on the land. An FSI of 2.0 indicates that you can have floor space upto twice the size of the plot area. 

Q. What is the difference between the Carpet Area and the Built-up Area?

A. Built-up Area = Carpet Area + thicknesses of internal and external walls + balcony space.

Q. Are balconies and terraces part of the RERA Carpet Area?

A. No. As per the official RERA mandate, balconies and terraces must be revealed as separate entities and not part of the carpet area.