Passive investing refers to the process of investing in commercial real estate without actively managing the property or the investment. Passive investors typically provide capital to an experienced property developer or manager, who is responsible for acquiring, renovating, and operating the property. The passive investor receives a share of the income or profits generated by the property in return for their investment.
Passive investing can be an attractive option for individuals or organizations that do not have the time, expertise, or resources to actively manage a commercial property themselves. It can also be a way to diversify a portfolio and potentially generate a consistent stream of income. However, it is important for passive investors to thoroughly research and evaluate the property developer or manager before making an investment, as the success of the investment will depend on the skill and experience of the manager. Passive investors should also be aware that commercial real estate investments can involve significant risk, and it is important to carefully consider the potential risks and rewards before making an investment.