A listing says "6.00% yield". Not 5.83%. Not 6.12%. Exactly 6.00%.
That number may be fine. But a perfectly round yield is a reason to ask one question before anything else: what is the actual rent, and where is it written?
The short answer
Fact: Gross rental yield is annual rent divided by price. If a yield lands on exactly 4.00%, 5.00% or 6.00%, the price may have been worked out backwards from a target yield, rather than the yield being worked out from a real rent and a negotiated price.
So do not start with the yield. Start with the rent in the lease, then work out the yield yourself. If the rent cannot be shown, the yield is only a claim.
Why round yields happen
A round yield is simple arithmetic. Each yield matches a fixed multiple of monthly rent:
| Quoted gross yield | Price as a multiple of monthly rent |
|---|---|
| 4.00% | Rent × 300 |
| 5.00% | Rent × 240 |
| 6.00% | Rent × 200 |
| 8.00% | Rent × 150 |
If someone takes a monthly rent and multiplies it by 200, the yield will always come out at exactly 6.00%. Nothing about the tenant, the lease or the location went into that number.
VRX observation: A pattern we often see in pre-leased listings across Delhi NCR is yields sitting on exactly 4.00%, 5.00% or 6.00%. That alone does not make a listing wrong. It tells you the price was likely set from a target, and that you still have to test it.
Why it matters to your money
- The rent may not be the rent. The figure used can be an expected rent, a rent after the next escalation, or a rent still under discussion.
- The rent may not be fixed. Some income is a revenue share, which moves with the tenant's sales. That is not the same as a fixed monthly rent.
- The yield may hide the lease. A 6.00% yield with one year left on the lease is not the same asset as 6.00% with eight years left.
- The price carries no judgement. A multiple says nothing about whether this tenant, lease and location deserve that price.
Looking at a pre-leased listing and unsure if the numbers hold? Talk to VRX Capital before you commit. Call / WhatsApp: +91 9315368515.
How to check a quoted yield: the VRX lens
At VRX Capital, yield is not the investment thesis. We look at tenant, lease, cash flow, asset, location, price and exit together. We also work out every yield from price and rent ourselves, rather than repeating a quoted percentage. Here is the order to follow.
1. Ask for the monthly rent in rupees
Not the yield. The rent. If the seller can only give a percentage, pause.
2. Match it to the lease deed
The rent should be written in the registered lease, along with the escalation schedule. See why lease registration matters.
3. Confirm it is being paid
Ask for bank statements showing rent received and the TDS certificates the tenant issues on rent. A corporate tenant usually deducts TDS on rent.
4. Check whether it is fixed rent or revenue share
If income depends on the tenant's sales, treat it as variable. Do not compare it like-for-like with a fixed rent.
5. Work out the yield yourself
Annual rent ÷ price × 100. Our guide on how rental yield is calculated walks through it.
6. Then judge the price
Only now ask whether the tenant, the lease term left and the location justify the price. A real rent can still sit on an expensive price.
Illustrative example
Illustrative example. Not a real property or tenant.
A shop is offered at ₹9 crore with a quoted yield of 6.00%. No rent is given.
| Step | What the investor finds |
|---|---|
| Rent implied by the listing | ₹4,50,000 a month (₹9 crore ÷ 200) |
| Rent written in the lease today | ₹4,20,000 a month (₹4,50,000 is the rent after the next escalation) |
| Real gross yield today | ₹50,40,000 ÷ ₹9 crore = 5.60% |
| Price for a true 6.00% on today's rent | ₹4,20,000 × 200 = ₹8.40 crore |
The quoted 6.00% was not false arithmetic. It used a future rent. On today's rent, the same price gives 5.60%, and the ₹60 lakh gap is the escalation being sold to you in advance.
Common mistakes
- Comparing listings by yield without seeing the rent behind each one.
- Accepting a yield when the rent is "on request".
- Treating a revenue-share income as fixed rent.
- Paying today for a rent that only starts after the next escalation.
- Ignoring how many years are left on the lease. See residual lease tenure.
Checklist before you trust a yield
- Monthly rent stated in rupees
- Same rent written in the registered lease
- Rent receipts confirmed through bank statements and TDS certificates
- Fixed rent, not revenue share (or clearly marked if it is)
- Yield worked out by you from rent and price
- Lease term left, lock-in and escalation checked against the price
Also read whether 6% is a good yield and why an assured return is not rent.
FAQ
Is a round-number yield always a red flag?
No. It is a prompt, not a verdict. It usually means the price was set from a target yield. Check the rent and the lease before you decide.
How do I check the yield on a pre-leased property?
Take the monthly rent from the lease, multiply by 12, divide by the price and multiply by 100. Then confirm the rent is actually being paid.
What if the seller gives a yield but not the rent?
Ask for the rent in rupees and the lease deed. Without them, you cannot check the yield or the price.
Is revenue-share income the same as rent?
No. Revenue share moves with the tenant's sales. It can rise or fall, so it should not be shown as a fixed yield.
Gross yield or net yield: which should I compare?
Start with gross yield to compare listings on the same basis. Then work out net yield after tax and costs before you buy.
This is general information, not legal or tax advice. Please verify lease, TDS and tax points for your property with a qualified professional.
Talk to VRX Capital
If you want a second view on the numbers behind a pre-leased listing, we are happy to help. Visit For Investors or contact us.
Call / WhatsApp: +91 9315368515
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