Invest in Credit Risk Mutual Fund or not?

What are Credit Risk Funds? Why investors stay away from this investment? How do these funds work? How much is the risk in this investment?

  • Last Updated : April 19, 2024, 13:41 IST
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Buying a home is certainly a difficult task because it takes lots of effort and requires a huge investment. Whenever you look for a property, its size is one of the most prominent features that you consider. The size of a property, or its ‘area’, is measured as square feet (sq. ft.). So, a mid-sized apartment could be 600 sq. ft. while a 1,000 sq. ft. apartment would be considered large, regardless of the number of rooms.

In the real estate industry, size is defined in three different ways. They are carpet area, built-up area, and super built-up area, and these terms can be confusing to you if you are a new buyer. Let’s know about these terms here

Carpet area

A carpet area is an area that could be covered by a carpet excluding the thickness of the inner walls of an apartment. It is the actual area that can be used in an apartment. Space covered by a lobby, lifts, play area, and other common areas does not fall under the carpet area. It is important to check the carpet area before investing in a property because it will give you a clear picture of how much space is available in an apartment.  Carpet typically occupies around 70% of a built-up area.

How to calculate the total carpet area?

According to Liases Foras MD & real estate expert Pankaj Kapoor, ”Carpet area should be around 70-80% of built-up area. You can easily calculate by asking the builder the total built-up area. For instance, if the built-up area is 1,000 sq ft, your carpet area should be 70% of 1,000 sq. ft, which is, in this case, is 700 sq. ft. So your carpet area is 700 sq. ft.”

Built-up area

The built-up area is the total carpet area plus the thickness of the walls. It also includes a dry balcony and private terrace space. It includes all areas belonging solely to one particular unit. You should also remember that shared walls between units are factored in at 50% and other walls are calculated at full size.

How to calculate built-up area?

The built-up area is calculated by adding the carpet area, area of walls, area of utility (balcony and private terrace, etc). Generally, the built-up area is 20-30 % more than the carpet area.

Super built-up area

Super built-up area or saleable area is the area calculated by adding the built-up area and proportionate share of the common area that includes the corridor, stairs, lift lobby, lift, etc. Proportionate share here refers to the sum total of all common areas divided by the total number of flats in your building complex. “Selling properties on the basis of the super-built-up area is now illegal and only carpet area is a valid ‘denomination’. As a result, builders are now offering all-inclusive packages which cover all the statutory charges of property purchase such as stamp duty and registration fees,’’ said Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants.

Published: June 23, 2021, 20:20 IST
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