Real Estate can have a few technicalities, weaved in its jargon. Understanding these technicalities is important as this can eventually be a matter of profit and loss for a new buyer. One such technical term is called the loading factor. It is important for a buyer to know about this factor since it can make a massive difference to one’s decision of purchasing an apartment or not.
What is loading factor?
The difference between the super-built up area and the carpet area is called loading. The carpet area is the area in an apartment that can be carpeted. It includes the cumulative area of all the rooms, the lobbies, the balconies, the rest rooms and the kitchen. One simply needs to multiply the length and the breadth of each room, lobby, balcony, rest room and kitchen, individually, and then add them together to get the carpet area. While calculating the carpet area, one does not take the space used by the walls and the ducts, into account.
The built-up area of an apartment is the carpet area cumulated with the area taken by the walls and the ducts. The super built-up area on the other hand is the built-up area, cumulated with all the common spaces such as parking, club house, passage area, lift area, etc. While making such a calculation for a given apartment, the average of the common spaces allocated to all flats, is taken into account. The super built-up area is also called the saleable area.
How is loading factor calculated?
There is a simple formula that calculates the loading factor. The formula is as below:
Carpet area X (1-loading factor) = super built-up area
Taking an example, if the carpet area of a residential apartment is 1,000 sq ft and the super-built up area is 1,200 sq ft, here is how the loading factor will be calculated:
1000 X (1-loading factor) = 1200
1-loading factor = 1200/1000
1-loading factor = 1.2
Loading factor = 1.2 - 1
Loading factor = 0.2
The loading factor is this case will be 0.2, or 20 per cent, as talked about in real estate terms.
How is loading factor useful for the buyer?
In the real estate industry, it is generally believed that the ideal loading factor of an apartment should be 30 per cent or below. If the loading factor is beyond 30 per cent, it means that there is a considerable chunk of the super-built area that is not a part of the carpet area. It also means that it is not exactly ideal for the apartment owner since it is the carpet area that is most beneficial and can be used by the owner.
Moreover, when a developer or a broker calculates the cost of a flat, he does that on the saleable area. This means that a new owner pays not just for the carpet area, but for the super built-up area as well. Thus the buyer must make sure that he ends up having a good deal and does not pay extravagantly in the name of saleable area, which may not be of direct importance for the end user.
Resource : http://www.99acres.com/articles/understanding-loading-factor-and-its-implications.html
What is loading factor?
The difference between the super-built up area and the carpet area is called loading. The carpet area is the area in an apartment that can be carpeted. It includes the cumulative area of all the rooms, the lobbies, the balconies, the rest rooms and the kitchen. One simply needs to multiply the length and the breadth of each room, lobby, balcony, rest room and kitchen, individually, and then add them together to get the carpet area. While calculating the carpet area, one does not take the space used by the walls and the ducts, into account.
The built-up area of an apartment is the carpet area cumulated with the area taken by the walls and the ducts. The super built-up area on the other hand is the built-up area, cumulated with all the common spaces such as parking, club house, passage area, lift area, etc. While making such a calculation for a given apartment, the average of the common spaces allocated to all flats, is taken into account. The super built-up area is also called the saleable area.
How is loading factor calculated?
There is a simple formula that calculates the loading factor. The formula is as below:
Carpet area X (1-loading factor) = super built-up area
Taking an example, if the carpet area of a residential apartment is 1,000 sq ft and the super-built up area is 1,200 sq ft, here is how the loading factor will be calculated:
1000 X (1-loading factor) = 1200
1-loading factor = 1200/1000
1-loading factor = 1.2
Loading factor = 1.2 - 1
Loading factor = 0.2
The loading factor is this case will be 0.2, or 20 per cent, as talked about in real estate terms.
How is loading factor useful for the buyer?
In the real estate industry, it is generally believed that the ideal loading factor of an apartment should be 30 per cent or below. If the loading factor is beyond 30 per cent, it means that there is a considerable chunk of the super-built area that is not a part of the carpet area. It also means that it is not exactly ideal for the apartment owner since it is the carpet area that is most beneficial and can be used by the owner.
Moreover, when a developer or a broker calculates the cost of a flat, he does that on the saleable area. This means that a new owner pays not just for the carpet area, but for the super built-up area as well. Thus the buyer must make sure that he ends up having a good deal and does not pay extravagantly in the name of saleable area, which may not be of direct importance for the end user.
Resource : http://www.99acres.com/articles/understanding-loading-factor-and-its-implications.html
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