What Is The Loading Factor in Real Estate? What Is The Ideal Range?

What Is The Loading Factor in Real Estate? What Is The Ideal Range, In real estate, it is a usual practice that the brokers and developers take advantage of unaware customers. They frequently guide them wrong or mislead the buyers with exorbitant rates into purchasing tiny living spaces.

A first time buyer will think while buying a flat that he will get possession of the entire area for which he is paying. But, it is wrongly thought as and to safeguard you from such frauds and misleading acts, let’s get to know a few important terms used in the real estate sector is essential.

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Investing in property is a tough decision as it involves lot of research and finance, being a big market real estate has plethora of terms. Such as super-built area, and carpet area, used which might confuse you and you won’t be very clear about it. These factors are significant and influence the final price of the apartment. Out of all one such term is the loading factor.

In this article, understand what is loading factor, how to calculate and the ideal loading factor.

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What Is The Loading Factor?

The loading factor can be defined simply as the difference between the super built-up area and the carpet area of the flat for sale.

The cost of the facilities/equipment installed in the project is ultimately for builders to recover. These include to list a few are, elevators, lobby, maintenance room, parking, and terrace.

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How do you calculate the Loading Factor?

The loading factor in real estate can be easily calculated by the formula mentioned below:

Super built Area= Carpet Area * (1- Loading Factor)

Let’s say, an apartment for sale has a super built-up area of 1,500 sq. ft. and 1,200 sq. ft. as the carpet area.

1,500 = 1,200 X (1-loading factor)

1- Loading factor = 1,500/1,200

1- Loading factor = 1.25

Loading factor = 1.25 – 1

So, the answer is 0.25 or 25%.

Generally, the loading factor of the locality is always given in percentage.

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What is the ideal Loading factor?

It is considered that the loading factor should always be 30 percent for an apartment in an ideal scenario. If it is above that, then the buyer will have less carpet area, and more will be the super built-up area. This would leave a smaller space within their homes for sale for buyers.

Ideal Loading factor (%) in different Cities

• Mumbai Metropolitan Region (MMR)-- 40-50

• Delhi-NCR-- 30-40

• Bangalore-- 20-30

• Chennai--25-30

Be Careful Before Buying A Property

There is no specific law for loading factor, and it totally depends on the builder. In some of the residential projects it can go up to 50%. As a result, home buyers could find themselves in small apartments, despite paying a high price. On the basis of the facilities offered, builders typically justify elevated loading.

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If the projects are huge then the loading will always be higher as more area will be allocated for the facilities and open areas compared to smaller projects that do not have many frills added.

Nevertheless, consumers need to make educated and knowledgeable decisions and consider precisely what they will get for the price they charge.

To confuse, in the market many builders use a different formula for the calculation of loading factor to show a lower value.

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1500 x (1 – Loading factor) = 1200

1 – Loading factor = 0.8

Loading factor = 0.2 or 20%.

So, be careful and after final analysis only, book your flat.

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