"10% assured return till possession. Lease guaranteed for 3 years after that."
It sounds like a pre-leased property. It is not. One is a promise from a builder. The other is rent from a tenant. If you mix them up, you can end up pricing a shop on income that may not exist after a few years.
The short answer
An assured return is money the developer promises to pay you. Pre-leased rent is money a tenant pays you under a signed lease. In an assured-return or lease-guarantee scheme, there is usually no tenant yet, no lease deed to read and no rent history. The payment depends on the developer's ability and willingness to pay. A pre-leased property has a named tenant, a lease you can read, and rent you can verify. So the two should never be compared on the same "yield" number.
Why this matters for your money
Assured-return schemes are common in under-construction commercial projects, especially shops and small office units. The headline number is often higher than what an occupied, tenant-paid property gives. That gap is the trap.
- Who pays: with an assured return, the developer pays. With a pre-leased asset, the tenant pays.
- What backs it: an assured return rests on a clause in your agreement with the developer. Pre-leased rent rests on a lease the tenant has signed.
- How long it lasts: assured returns usually stop at possession or after a fixed guarantee period. After that, the unit must find a real tenant at a real market rent.
- What you can check: a tenant's business, lease terms, lock-in and payment record can be checked. A future tenant cannot.
VRX observation: the same pitch keeps coming back
A pattern we often see: a scheme is shared with investors as "pre-leased" or "5%+ ROI", but when you read the papers, there is no lease at all. There is only a developer's assured return, a lease guarantee, or a promised "return on fit-out cost".
At VRX Capital, we do not compute or quote a yield from an assured-return or lease-guarantee scheme, and we do not present such a scheme to investors as pre-leased. A builder's promise is not a tenant's rent. We treat it as a different product with different risks.
A simple framework: five questions to ask
Yield is not the investment thesis. What matters is the tenant, the lease, the cash flow, the asset, the location, the price and your exit. Apply that to any "assured" pitch:
- Is there a tenant today? Ask for the tenant's legal name. If the answer is "a brand is coming", there is no tenant yet.
- Is there a signed lease? An LOI or a "tie-up" is not a lease. Ask for the executed lease deed. (See our guide: LOI is not a lease.)
- Who is actually paying you, and from what? If the developer pays, your income depends on the developer's finances and the project's progress.
- What happens when the guarantee ends? Ask what market rent a similar, occupied unit in that micro-market earns today. That number, not the guaranteed one, decides your long-term return.
- Was the price set from the guaranteed number? If the price was worked backwards from an assured return, you may be paying today for income that ends in a few years.
If you are comparing an assured-return offer with a genuinely leased asset, talk to VRX Capital before you sign. Call / WhatsApp: +91 9315368515.
Illustrative example
Illustrative example. Not a real property, project or tenant. Figures are made up to show the arithmetic.
| Stage | What you receive | Monthly | On ₹60 lakh paid |
|---|---|---|---|
| Till possession | 10% assured return from the developer | ₹50,000 | 10.0% a year |
| 3 years after possession | Lease guarantee of ₹100 per sq ft on 400 sq ft | ₹40,000 | 8.0% a year |
| After the guarantee ends | Real tenant at an assumed market rent of ₹60 per sq ft | ₹24,000 | 4.8% a year |
The first two lines are promises. Only the last line is rent. In this example, the long-term income is less than half of what the pitch led with. And if the unit takes months to lease, or the developer delays payments, the real number is lower still.
Common mistakes
- Calling an assured-return unit "pre-leased" because a brand name is attached to the pitch.
- Comparing a 10% assured return with a 4–5% bank-leased property as if they were the same kind of income.
- Ignoring the period after the guarantee ends, which is the longest part of your holding.
- Not reading who is liable to pay, for how long, and what happens if possession is delayed.
- Assuming every forum will treat a missed assured-return payment the same way.
Fact: the legal position is not uniform
Indian forums have not taken one single view on assured returns. In a 2024 order, the Haryana RERA directed a developer to pay assured returns due under an MOU and held that the Banning of Unregulated Deposit Schemes Act, 2019 did not bar those payments. In a separate Uttar Pradesh case, the regulator treated a similar arrangement as outside its forum and sent the buyer to a civil court; that dispute was taken to the Allahabad High Court in 2023. The practical point: if payments stop, how and where you can recover them depends on your agreement and the forum. This is general information, not legal advice. Please verify your agreement with a qualified lawyer before investing.
Checklist before you sign
- Named tenant and signed lease deed, or no tenant at all? Know which one you are buying.
- Exact clause for the assured return: who pays, how much, from when, until when.
- Lease guarantee terms: amount, duration, and what happens if no tenant is found.
- Today's market rent for a similar occupied unit nearby.
- Price checked against that market rent, not the guaranteed figure.
- Agreement reviewed by your own lawyer.
FAQ
Is an assured return the same as rental yield?
No. Rental yield is rent paid by a tenant divided by the price you paid. An assured return is a payment promised by the developer, usually for a limited period.
Is a lease guarantee the same as a pre-leased property?
No. A lease guarantee means the developer promises a minimum rent for some time. A pre-leased property already has a tenant under a signed lease.
What happens when the assured return ends?
Your income then depends on finding a tenant at market rent. That rent can be lower than the guaranteed amount, and the unit may be vacant while it is being leased.
Can I recover assured returns if the developer stops paying?
It depends on your agreement and the forum. Different authorities have taken different views. Speak to a qualified lawyer about your specific agreement.
How do I compare an assured-return offer with a pre-leased asset?
Compare the pre-leased asset's actual rent with the market rent the assured-return unit is likely to earn after the guarantee ends. Do not compare the headline numbers.
Speak to VRX Capital
If you want a second view on an assured-return offer, or want to see how genuinely leased commercial assets are evaluated, visit our For Investors page or get in touch.
Call / WhatsApp: +91 9315368515
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