Month: February 2019


When buying your dream home or investing in property for the first time, you may come across jargon that you need to understand. Floor Space Index (FSI) or Floor Area Ratio (FAR) is one of the most important real estate terms that are key to making a smart decision when buying property. To put it simply, the Floor Space Index is a ratio of the built-up area to the total plot area.

Who regulates the FSI and how is it calculated?

The Directorate of Town and Country Planning (DTCP) regulates the FSI. An FSI differs from building to building, irrespective of its location. It depends on the city zone, number of floors of the building, and other factors like amenities provided. The calculation of FSI also depends upon the type of building construction, residential or commercial, the function of the building, and the number of floors it has.

Based on this, the builders pick the relevant FSI from the ready-reckoner circulated by the government every year. The ready-reckoner refers to the government rates used to calculate property taxes such as stamp duty and others.

The Floor Space Index is calculated using the following formula:

Floor Space Index = Floor space covered in all the floors/Total area of the plot

What is the premium on FSI?

Usually, the government fixes the FSI for every location and the builders have to abide by it. However, in some cases, the developers can avail an extended FSI, for which the government charges a fee known as premium on FSI.

What is the role of the Floor Space Index in the real estate industry?

An increase or decrease in FSI has a great impact on the real estate industry. Read on to know more.

1.  It enhances the skyline of the city

An increase in the FSI results in adding more floors to a building. This means if the government proposes FSI increases, the location will see more of vertical properties, which will decongest a city and add tall building complexes, both residential and commercial.

2. It increases the scope of development

Apart from the visual enhancements of the skyline, an over-crowded city can enjoy a greater advantage of an increasing FSI. Over-crowded cities like Mumbai, Hyderabad, and others attract a large number of people from other cities owing to reasons like employment opportunities and a higher standard of living. Thus, they experience a scarcity in vacant space to build affordable housing projects. So, the projects offering housing facilities sell at a heavy price. FSI is one of the most effective ways to combat this problem. Developers can add more floors to their buildings and offer additional flats for sale. Thus, FSI also affects the scope of development in the city.

 3. It spikes real estate prices

As you know, the government charges a premium on a higher FSI, which is borne by the builder or construction company. Thus, the burden of an increased cost of construction is most likely to send property prices soaring. In places like Mumbai, where realty prices are already on the higher end, an increase in FSI will definitely pinch the pocket. Thus, FSI has a critical impact on real estate in Mumbai, Pune, Hyderabad, and the other cities. Even if the economy is expecting a correction in real estate prices, increases in FSI may make real estate more expensive.

So, make sure that you pay close attention to the FSI when you are looking to buy a home. Moreover, consider the increased cost to allow yourself enough time to arrange for the same. In terms of borrowing a home loan, consider a Bajaj Housing Finance Limited Home Loan that gives you access to an amount of up to Rs.3.5 crore. This means you need not worry about shelling out an extra sum for the increased property prices.

You can also evaluate your needs and start your property searchright away with Bajaj Housing Finance Limited. Whether you are looking for flats in Mumbai or a villa in Bangalore, you can find RERA-compliant properties here. Look for properties like JP North in Mira Road, which offers flat configurations to meet every family’s needs at affordable price. Choose from 1RK, 1BHK, 2BHK, and 3BHK variations according to your family size here. In addition to basic amenities, JP North in Mira Road also offers lifestyle amenities like a club house, children’s play area, and more. Benefit from the property dossier offered by Bajaj Housing Finance to learn the financial and legal aspects of buying a home.

To view your customised deal, check your pre-approved offer from Bajaj Housing Finance Limited and expedite your financing for a home.

Categories: Real Estate

Tips For A Successful House Hunting Experience

When you are in the process of buying a home, you may feel stressed out or overwhelmed. You may be having a hard time finding the perfect home. One reason for this is that you are not educated about the home selling. The following article is going to change your lack of home buying knowledge.

When you enter the arena of real estate purchasing, be wary of mortgages with balloon payments. Balloon payments are surprisingly large payments the mortgage owner is required to make at the end of the loan term. They are ethically doubtful, and they usually indicate that the loan provider is unscrupulous. When you identify balloon payments, stay away!

If you want to purchase a brand-new house, consider searching in the fall season. Builders often mark down prices beginning in September in an effort to close out their old inventory before the start of the new year. They raise those prices again in the spring, so make the most of the deals while they are available.

When considering a piece of real estate you feel you may want to buy, talk to the owners of neighboring properties if you can. Realtors, mortgage providers, and sellers have their own interests and biases when they tell you about the neighborhood. The people who live and work right next to your potential property have first-hand experience with the area. Pick their brains if you can.

Commercial Real Estate

One important tip to remember when investing in commercial real estate is to try to avoid the most common first purchase – apartments. This is important because of over saturation as well as the possibility for a much higher profit elsewhere. Try to pick a specialty property that is unique to you.

One important tip to remember when investing in commercial real estate is to make sure you establish a good network of agents and investors before attempting to enter the market. This is important because you need people on the inside to help you get funding, the latest tips and trends, and first notice for property availability.

For Sale By Owner

If you’re an experienced investor, consider “for sale by owner” properties. For sale by owner properties often present an excellent investment opportunity for investors who are familiar with the purchase process, and who would prefer to save on agent commissions. There are many different ways to structure a FSBO deal; it’s a matter of finding the one that works best for you.

First time investors need to be aware of some challenges associated with properties that are listed as ‘for sale by owner’. Many times, investors have purchased these properties (or want to purchase additional properties in the area) and they are simply testing the market to see how much they are actually offered. Dealing with ‘for sale by owner, property may be complicated, and the process of settling on a contract can get fairly lengthy. Therefore, you might want to consider these properties down the road, after you are a more experienced investor.

As was stated in the beginning of this article, one reason that the home buying process may not be going your way is because you do not know the most important aspects. The article above has given you advice on how you make the most of your home buying experience.…