Are you a newbie in real estate investing or planning to invest in Mumbai real estate for the first time? If yes, then we are happy to help you with this. Whether you are planning to diversify your investment portfolio or make your first move by investing in real estate in Chennai or any other city, there are a handful of terms and jargon that you must know beforehand. So the next time you hear the terms EMI, ROI, etc., you will know what they exactly mean. 

 

One thing to note is that as a beginner, it is not practical to learn all the terms at first go, but once you gain experience, you will get to the meaning of all of them. Here is a list of the top 5 real estate terms that every person investing in property in Delhi or any other city must know.

Return on Investment (ROI)

Return on Investment or ROI is a measure of profit that a person gets on an investment. The ROI value is calculated by dividing the net profit by the total capital cost of investment. The more the ROI, the better the profit is generated. With the help of ROI, you can decide whether an investment in real estate in Chennai or any other city is profitable or not. 

Mathematically, ROI = Net Income / Cost of investment

 

Cash Flow

Cash flow refers to the net amount of cash you earn per month from a property after deducting all the operating costs. In other words, it is the net difference between money coming and money going out from your real estate asset. When your income is more than your operating costs or expenses, your investment is highly profitable and maintains a positive cash flow. But in case your expenses are more than your income, you are maintaining negative cash flow. Ideally, as an investor, you must invest in a property in Lucknow or any other city which maintains a positive cash flow.

Equal Monthly Installment (EMI)

EMI is the monthly amount that the borrower of the loan has to pay to the moneylender. Equal Monthly Installment is applicable for the buyers who are availing of a home loan to buy property in Lucknow or any other city. The value of EMI is calculated based on multiple factors that involve loan tenure, salary, age, credit history, loan amount, etc. You can even use an online home loan EMI calculator to calculate the EMI based on the principal loan amount, rate of interest, and loan tenure. 

Appreciation

Appreciation in the real estate market refers to a hike in the value of the property over a period of time. Factors like limited supply, high property demand, highly premium location, etc., can cause value appreciation for real estate. For instance, in a location where new and upcoming commercial developments are in progress, property prices are likely to appreciate rapidly. Besides this, properties with a unique view like lake, sea, or nature will have high demand amongst the buyers; therefore, such real estate in Chennai will witness a higher appreciation rate than other properties. 

Credit Score

Last but not least, a credit score is an essential term when it comes to investing in property in Delhi or any other city. A credit score is the measure of the creditworthiness of a person or the person’s eligibility to pay off a loan. Also known as CIBIL score, the credit score is a three-digit number ranging between 300 to 900. A good credit score is considered to be 750 or more. Before issuing a home loan, banks and other lenders measure the credit score of a person, and this is calculated on the past credit history of the person. The better the CIBIL score, the more are the chances of getting a home loan approved. 

 

Investing in Mumbai real estate or the real estate market of any other city in India is one of the most profitable investments. Property is a lifetime asset that increases in value over time, and if you are aware of the real estate market and its terms, you can easily make the right investment. So, without wasting much of your time, invest in real estate now with the help of Clicbrics.