1070+ property terms explained in plain words: RERA, land records (Fard, Jamabandi, 7/12, Patta), documents, law, tax, finance and state-specific vocabulary. Each term has its legal basis, an Indian example and a tip for agents.
Reviewed 16 October 2026 · 1073 terms · 14 topics
The pace at which new homes or space in a market are sold or leased, usually per month or quarter.
Example: A micro-market sells 300 units a month while 3,600 are unsold. At that rate the stock lasts a year.
Agent tip: A slow absorption rate warns of price pressure.
Related: Unsold Inventory Inventory
Also called: AIF, Real Estate AIF, Category II AIF
A privately pooled fund registered with SEBI that invests in assets other than ordinary shares and bonds. Real estate AIFs fall under Category II. Investors must put in a large minimum amount, so they are aimed at wealthy investors.
Legal basis: SEBI (Alternative Investment Funds) Regulations, 2012; the minimum investment per investor is ₹1 crore, subject to the regulations.
Example: A fund pools money from HNIs to lend to residential projects in the Delhi NCR, and each investor commits at least the regulatory minimum.
Agent tip: Do not sell AIFs casually. Check the fund's SEBI registration, track record and exit terms.
Related: SEBI REIT (Real Estate Investment Trust) Collective Investment Scheme
The point at which rental income covers all ownership costs such as EMI, maintenance and taxes.
Example: With monthly costs of ₹55,000 and rent of ₹30,000, the investor needs more rent or a lower EMI to break even.
Agent tip: Include vacancy months in your break-even calculation.
The increase in the value of a property over time from location growth, infrastructure, demand and inflation.
Example: A plot bought for ₹30 lakh now sells for ₹45 lakh, a gain of ₹15 lakh.
Agent tip: Never promise appreciation. Show past data and explain the risks.
Related: Rental Yield Capital Gains
The net operating income of a property divided by its price. Investors use it to compare income properties.
Example: A shop earning ₹9 lakh NOI and priced at ₹1.2 crore has a cap rate of 7.5%.
Agent tip: A higher cap rate means more income per rupee, but may signal more risk.
Related: Net Operating Income (NOI) Rental Yield
Also called: Cash Yield on Equity
The yearly cash income from a property divided by the cash the investor actually put in. It is useful when a loan is used, because it measures return only on the investor's own money, after loan payments.
Example: Divya invests ₹30 lakh of her own money in a Mohali shop, receives ₹2.4 lakh a year after paying the loan EMI, and earns an 8% cash-on-cash return.
Agent tip: Include all costs, such as repairs, maintenance and vacancies, when you calculate it. Ignoring them makes the figure look better than it is.
A pooled investment arrangement in which money from many people is managed by another party for returns. Schemes that are not registered with SEBI are illegal.
Example: A company sells "fractions" of land to the public and promises returns without SEBI registration.
Agent tip: Warn clients about schemes that pool money for land or flats and promise fixed returns.
Related: Land Banking Assured Return
Recent sale prices of similar properties nearby, used to estimate the value of a property.
Example: Three 3 BHK flats of similar size in the same tower sold at ₹82 to ₹86 lakh in the last six months.
Agent tip: Keep a record of recent comps for your micro-market.
Related: Market Value Valuation Report
Also called: CAGR
The smoothed yearly rate at which an investment grew between two dates, as if it had grown by the same percentage each year. It lets you compare a property's growth with other investments over different periods.
Example: A plot bought for ₹40 lakh and sold for ₹64 lakh after five years grew at a compound rate of about 10% a year.
Agent tip: Use it for fair comparison, but remember that it ignores rent earned and costs of holding.
Related: Capital Appreciation Return on Investment (ROI) Internal Rate of Return (IRR)
Also called: Replacement Cost Method, Depreciated Replacement Cost
A valuation method that adds the land value to the cost of rebuilding the structure today, less depreciation for age and wear. It is used for new buildings or special properties with few comparable sales.
Example: To value a school building in Kharar, a valuer takes the plot value and adds the cost of building it today, after reducing it for age.
Agent tip: Check how depreciation was calculated, since it drives the value.
Related: Market Value Valuation Report Sales Comparison Approach
Also called: DCF
A valuation method that estimates what future cash flows from a property are worth today, by discounting each one at a chosen rate. It reflects both the timing of cash flows and the risk involved.
Example: A valuer estimates ten years of rent from a Zirakpur office block plus an expected sale price, discounts each at 11%, and adds them to get today's value.
Agent tip: DCF results move a lot with the discount rate and rent growth assumptions. Ask to see those inputs.
Related: Net Present Value (NPV) Internal Rate of Return (IRR) Net Operating Income (NOI)
Also called: Forced Sale Value, Realisable Value
The price a property would fetch if it had to be sold quickly under pressure, such as a bank auction or urgent need for cash. It is usually lower than the normal market value, and valuers often report it separately.
Example: A flat valued at ₹60 lakh may have a distress sale value of ₹48 lakh in an auction, because buyers have little time and cannot inspect it.
Agent tip: Bank loans against property are often sized on distress value. Ask the valuer to state both figures.
A property sold under pressure, for example because of loan default, litigation or an urgent sale, often at a discount.
Example: A bank-auction flat is listed at 25% below market.
Agent tip: A low price is often a sign of legal or physical problems. Check everything.
Related: Bank Auction Property Due Diligence
The part of a property's value that the owner holds, equal to market value minus the outstanding loan.
Example: A flat worth ₹80 lakh with a ₹40 lakh loan balance gives ₹40 lakh equity.
Agent tip: Equity rises with repayment and price gains.
Related: Home Loan Market Value
A lease or sale term allowing price or rent to rise at set intervals. Commercial leases often include an annual or three-yearly increase of 5 to 15%.
Example: A lease starts at ₹80 per sq ft with a 5% increase each year.
Agent tip: Check how the increase is calculated and when it applies.
Related: Lease Deed Pre-Leased Property
A model in which many investors own a share in a commercial property through a pooled structure. In India SEBI has created the SM REIT framework for such pooled structures. Platforms outside a SEBI registration may not be lawful.
Example: Ten investors pool ₹10 lakh each to buy a share of an office leased to a company.
Agent tip: Ask whether the platform is registered with SEBI before you recommend it.
Also called: GDV
The total revenue a developer expects from selling all units in a project at the planned prices. Lenders and investors compare it with the cost of land, construction, finance and approvals to judge viability.
Example: A developer in Panchkula expects to sell 120 flats at an average of ₹1 crore, so the project's GDV is ₹120 crore.
Agent tip: GDV is an estimate. Ask what price and sales speed it assumes.
Related: Residual Land Value Method Joint Development Agreement (JDA) Break-Even Point
Also called: HBU
The most profitable and lawful use of a piece of land that is physically possible and financially worthwhile. Valuers use it to decide what a site is worth, which may differ from how it is used now.
Example: A petrol-pump-sized corner plot in an upcoming sector is valued as a commercial site because zoning allows shops, not as a residential plot.
Agent tip: Check zoning and permitted use before assuming a plot can earn more as a different use.
Related: Zoning (Land Use Zone) Floor Area Ratio (FAR) Market Value
Also called: Carrying Cost
The ongoing costs of owning a property that is not generating enough income, such as property tax, maintenance charges, loan interest, insurance and repairs. They reduce the investor's return.
Example: Kamal owns an empty plot in Banur and pays boundary maintenance and property tax each year while waiting for prices to rise.
Agent tip: Include holding costs when calculating returns on plots and unlet flats. They can quietly eat the appreciation.
Related: Land Banking Capital Appreciation Return on Investment (ROI)
Also called: Income Approach, Investment Method
A valuation method for income-producing property, which divides the net operating income by a capitalisation rate to find the value. It suits offices, shops, warehouses and rented buildings.
Example: A valuer divides a rented Panchkula showroom's yearly net income of ₹30 lakh by a capitalisation rate of 7.5% to get a value of ₹4 crore.
Agent tip: A small change in the cap rate changes the value a lot, so ask how it was chosen.
Related: Capitalisation Rate Net Operating Income (NOI) Pre-Leased Property
The yearly return rate that makes the present value of all cash inflows and outflows from an investment equal to zero. It considers the timing of each payment.
Example: An investor compares two projects, one with rent plus a sale after five years, and picks the higher IRR.
Agent tip: IRR helps compare projects with different payment timelines.
Related: Return on Investment (ROI) Rental Yield
Also called: Months of Inventory, Quarters to Sell
A situation in which a city or micro-market has so many unsold homes that it would take many years of current sales to clear them. It is measured by dividing unsold stock by the sales rate, and shows a risk of slow price growth.
Example: A micro-market in Zirakpur has 4,000 unsold flats and sells 500 a year, so clearing the stock would take about eight years.
Agent tip: Check for overhang by project and by price band before suggesting a locality. A high overhang gives buyers more negotiating power.
Also called: InvIT, Infrastructure Investment Trust
A trust regulated by SEBI that holds income-producing infrastructure such as toll roads or power lines and pays out most of its income to unit holders. It is not the same as a REIT, which owns offices and malls.
Legal basis: SEBI (Infrastructure Investment Trusts) Regulations, 2014.
Example: An investor buys units of a trust that owns highways, and receives a periodic payout from toll collections.
Agent tip: Do not call an InvIT a real estate investment. It owns infrastructure, so risks and returns differ from property.
Related: REIT (Real Estate Investment Trust) SEBI Collective Investment Scheme
Buying land in advance, with the expectation of price gains or later development.
Example: An investor buys plots on the edge of a growing city and holds them for ten years.
Agent tip: Check clear title, zone and approvals. Many land banking schemes have been unauthorised or fraudulent.
Related: Plot Capital Appreciation Collective Investment Scheme
Using borrowed money to buy an asset. It can raise returns when prices rise but increases loss when they fall.
Example: An investor buys a ₹1 crore flat with ₹20 lakh of own money and an ₹80 lakh loan.
Agent tip: Warn investors that leverage increases risk.
Also called: Illiquidity
The risk that a property cannot be sold quickly at a fair price when the owner needs cash. Property takes time to market, negotiate, check papers and register, so it is less liquid than shares or bank deposits.
Example: Hardeep needs money in a hurry but his Kharar plot takes eight months to find a buyer at a fair price.
Agent tip: Remind investors not to put money they may need soon into property.
The initial part of a lease when neither side can end the agreement without paying a penalty.
Example: A showroom lease has a 3-year lock-in. If the tenant leaves early, they pay the rent for the remaining months.
Agent tip: Check the lock-in period and penalty in commercial leases.
Related: Lease Deed Pre-Leased Property
The price at which a property would sell in an open sale between a willing buyer and a willing seller, both fully informed and neither under pressure.
Example: A flat sells at ₹58 lakh in an open market, while the circle rate is ₹52 lakh and the bank valuation is ₹55 lakh. The market value is what a buyer actually pays.
Agent tip: Use recent sales of similar units in the same project or sector to support a price.
Related: Circle Rate Valuation Report Comparable Sales (Comps)
Annual rent less operating costs such as maintenance, property tax and management, before loan payments and income tax.
Example: Rent of ₹12 lakh a year and costs of ₹2 lakh give an NOI of ₹10 lakh.
Agent tip: Use NOI to compare investments before financing.
Related: Capitalisation Rate Rental Yield
Also called: NPV
The value today of all future cash inflows from an investment minus the money invested, using a chosen discount rate. A positive NPV means the project earns more than the required return.
Example: An investor pays ₹80 lakh for a flat and discounts future rent and resale value at 9%. If the sum is ₹85 lakh, the NPV is positive ₹5 lakh.
Agent tip: Compare projects using the same discount rate. A higher rate lowers the NPV.
Related: Discounted Cash Flow (DCF) Internal Rate of Return (IRR) Return on Investment (ROI)
Also called: Residex, NHB Residential Price Index
A residential price index started by the National Housing Bank, which tracked housing prices in many Indian cities using data from sources such as banks and registration records. Check whether and how it is currently updated.
Example: A researcher compares an NHB Residex series for a city over a decade to see long-run price movements.
Agent tip: Do not treat any index as a price for one flat. Use it for background only.
Related: National Housing Bank (NHB) RBI House Price Index Capital Appreciation
A commercial property that already has a tenant and a lease in place when sold, so the buyer receives rent from day one.
Example: An investor buys an office with a tenant on a five-year lease at ₹1.2 lakh a month.
Agent tip: Read the lease for lock-in, escalation and exit rights. Check the tenant's strength.
Related: Lease Deed Rental Yield Escalation Clause
Also called: Housing Affordability Ratio
The average price of a home divided by the average annual household income in an area. A higher ratio means housing is less affordable. It is used to compare cities or track affordability over time.
Example: If homes in a city cost ₹60 lakh and the typical household earns ₹6 lakh a year, the ratio is 10.
Agent tip: Use it to explain why a market is stretched, not to predict a price fall.
Related: Affordable Housing Home Loan Eligibility Capital Appreciation
Also called: Price to Rent Multiple
The purchase price of a property divided by one year's rent it could fetch. A high ratio suggests buying is expensive compared with renting, and a low ratio suggests the opposite. It is a quick tool, not a full analysis.
Example: A flat costing ₹90 lakh that rents for ₹25,000 a month has a yearly rent of ₹3 lakh, so the ratio is 30.
Agent tip: Use the ratio to compare localities. Remember that it ignores loan costs, appreciation and tax.
Related: Rental Yield Rent vs Buy Analysis Capitalisation Rate
Also called: RBI HPI, All-India House Price Index
A quarterly index published by the Reserve Bank of India that tracks changes in housing prices across major cities, built from property registration data. It shows the trend in prices rather than the price of an individual home.
Example: A newspaper reports that the RBI's index shows prices up compared with the same quarter last year, but a buyer in a small town cannot use it to price a flat.
Agent tip: Use it for the trend, and local sale deeds for an actual price.
Related: Reserve Bank of India (RBI) NHB Residex Capital Appreciation
A property that is complete, has its occupancy certificate and can be occupied immediately.
Example: A buyer who needs a home by next month chooses a ready-to-move flat over an under-construction one.
Agent tip: RTM units cost more but carry less delivery risk. Check the OC.
Related: Under-Construction Property Occupancy Certificate (OC)
Also called: Government-Approved Valuer
A professional enrolled under the Companies (Registered Valuers and Valuation) Rules, 2017 to value land and buildings, plant, securities or other assets. Many financial and tax matters call for a valuation by a registered valuer.
Legal basis: Companies Act, 2013 and the Companies (Registered Valuers and Valuation) Rules, 2017.
Example: Before settling a family property division, Rajinder hires a registered valuer for land and buildings to get an independent report.
Agent tip: Ask the valuer for the registration number and check that the asset class is land and building.
Related: Valuation Report Market Value Fair Market Value as on 1 April 2001
Also called: REIT Payout, Distributable Cash Flow
The income a REIT passes on to its unit holders, which must be at least 90% of its net distributable cash flows under SEBI rules. It comes from rent and similar sources, and may be taxed partly as interest, dividend or rent.
Legal basis: SEBI (Real Estate Investment Trusts) Regulations, 2014.
Example: A unit holder receives a quarterly payout from a REIT that owns office parks, funded by tenants' rent.
Agent tip: Distribution yield changes with unit price and occupancy. Compare it over several quarters.
Related: REIT (Real Estate Investment Trust) SM REIT Rental Yield
Also called: REIT NAV
The value of a REIT's properties plus other assets, minus its debts, divided by the number of units. An independent valuer values the properties regularly. A REIT unit can trade above or below its NAV in the market.
Example: A REIT's NAV per unit is ₹350, but its units trade at ₹320 on the exchange, so they trade at a discount to NAV.
Agent tip: Compare a REIT's market price with NAV, and look at occupancy and debt before buying.
Related: REIT (Real Estate Investment Trust) Market Value Equity
A trust that owns income-producing property, such as offices and malls, and sells units to investors on a stock exchange. It distributes most of its income as dividends.
Legal basis: Regulated by SEBI under the REIT Regulations, 2014. A REIT must distribute at least 90% of its net distributable cash flow.
Example: An investor buys units of a listed REIT for ₹10,000 and receives a share of rent.
Agent tip: REITs offer exposure to commercial real estate without buying a property directly.
Related: SM REIT Rental Yield Fractional Ownership
Also called: Annual Rent Increase Clause
A term in a lease or rent agreement that raises the rent by a set percentage after a fixed period, such as every year or every three years. It protects the landlord from inflation and lets the tenant plan.
Example: A Chandigarh office lease raises the rent by 5% each year, so the tenant knows what he will pay in year three.
Agent tip: Specify the percentage and the dates. Vague rules cause disputes.
Related: Rent Agreement Lease Deed Escalation Clause
Also called: Rent or Buy
A comparison of the cost of renting a home with the cost of buying one, including the down payment, EMI, taxes, maintenance and the return the money would earn if invested elsewhere. The answer depends on price, rent, loan rate and how long you will stay.
Example: A young couple in Mohali compares a rent of ₹22,000 with the EMI, maintenance and lost investment return on a ₹70 lakh flat, and decides to rent for three more years.
Agent tip: Let the client stay time, job stability and savings drive the answer. Buying is rarely a good fit for a short stay.
Related: Price-to-Rent Ratio Home Loan Down Payment
Annual rent as a percentage of the property's price. Residential yields in India are often modest, while commercial property can yield more.
Example: A flat worth ₹80 lakh rents for ₹25,000 a month. The yield is ₹3 lakh divided by ₹80 lakh, or 3.75%.
Agent tip: Show gross and net yield, after costs such as tax and maintenance.
Related: Capitalisation Rate Net Operating Income (NOI) Return on Investment (ROI)
Also called: Resale
A property sold by a previous owner rather than by the developer. It is a second-hand or secondary-market sale.
Example: A buyer purchases a five-year-old flat from its owner.
Agent tip: Resale deals need extra checks on society dues, title, mutation and the seller's loan.
Related: Sale Deed No Dues Certificate Due Diligence
Also called: Residual Method, Development Method
A way to value land that a developer plans to build on. It takes the expected sale value of the finished project, subtracts construction cost, approvals, finance, marketing and the developer's profit, and treats the balance as what the land is worth.
Example: A developer expects ₹120 crore from selling flats on a Zirakpur site, subtracts costs and profit, and offers the landowner what is left as land value.
Agent tip: Landowners should test the builder's cost and price assumptions before accepting the figure.
Related: Joint Development Agreement (JDA) Land Banking Highest and Best Use
The total profit from an investment as a percentage of the money put in, including rent and price gain after costs.
Example: An investor puts in ₹50 lakh, earns ₹6 lakh in rent and sells for ₹60 lakh. Total gain before tax is ₹16 lakh.
Agent tip: Include stamp duty, brokerage and taxes when you calculate ROI.
Also called: Market Comparison Method, Direct Comparison Method
A valuation method that finds a property's value by comparing it with similar properties recently sold nearby, then adjusting for differences in size, age, floor, facing, amenities and condition.
Example: To value a 3 BHK in Sector 69, Mohali, a valuer looks at three similar flats sold last quarter and adjusts for floor and parking.
Agent tip: Use recent registered deals, not asking prices. Ask for sale deeds of comparable units.
Related: Comparable Sales (Comps) Market Value Valuation Report
Also called: Sales Run Rate, Sales Pace
The speed at which units in a project or area are sold, usually measured as units sold per month or per quarter. A steady rate shows demand, and a sharp slowdown can warn of weak interest or overpricing.
Example: A tower in New Chandigarh sold 60 of its 200 units in the first month, then only four a month afterwards.
Agent tip: Ask for sales data, not just brochures. Fast early sales can be driven by discounts.
Related: Absorption Rate Unsold Inventory Inventory Overhang
A refundable amount paid by a tenant to the landlord at the start of a lease to cover damage or unpaid rent.
Legal basis: The Model Tenancy Act, 2021 caps a security deposit at two months' rent for residential and six months' for non-residential premises, where a state has adopted it.
Example: A tenant pays a three-month deposit on a flat in a state that has not adopted the Model Tenancy Act, so the cap does not apply.
Agent tip: Record the deposit and refund conditions in the agreement.
Related: Rent Agreement Lease Deed
A small and medium REIT under SEBI's 2024 framework, for pooling money to own a single income-generating property. A scheme must hold assets of at least ₹50 crore and below ₹500 crore, with a minimum investment of ₹10 lakh.
Example: An SM REIT scheme owns one leased office tower and distributes rent to unitholders.
Agent tip: Check the SEBI registration and whether the platform has migrated into the SM REIT framework.
Related: REIT (Real Estate Investment Trust) Fractional Ownership
A project whose building is not yet complete. It usually costs less than a ready flat but carries delay and quality risks.
Example: A buyer books in a tower due for possession in 2028 and pays in stages.
Agent tip: Check RERA registration, the possession date, the escrow account and the builder's record.
Related: Ready-to-Move (RTM) RERA Registration Number Escrow Account
Completed or under-construction units that are on the market but not sold. Months to sell is the number of unsold units divided by the monthly sales rate.
Example: A city has 20,000 unsold flats and sells 1,000 per month, so it holds 20 months of inventory.
Agent tip: High unsold inventory can lead to discounts or offers.
Related: Absorption Rate Inventory
The share of time or units that a rental property stays empty.
Example: An office building has 15% of its floor space unlet.
Agent tip: Factor vacancy into rental income forecasts.
Related: Rental Yield Net Operating Income (NOI)
Also called: Development Yield
The yearly net income from a property divided by the total amount spent to buy or build it, including land, construction and fees. Developers use it to see whether a project earns more than the market cap rate.
Example: A developer spends ₹20 crore building a rental block in Mohali and expects ₹1.8 crore a year in net rent, a yield on cost of 9%.
Agent tip: Compare it with the current cap rate. A gap in your favour means a profitable project.
Related: Capitalisation Rate Net Operating Income (NOI) Rental Yield
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