Realtor Tony M. Guglielmo, CCIM Discusses the Importance of Investing in Commercial  Real Estate

Real estate investing goes well beyond residential. “Investing in commercial real estate can help people save more for their retirement, help with their children’s college savings or diversify one’s investment portfolio,” said Guglielmo, CCIM, broker/owner of Allied Commercial Real Estate. 

To further educate investors on commercial real estate, which can include retail buildings, office buildings, warehouses, apartment buildings and more, Guglielmo shares the following three tips on why it’s a necessary component to one’s investment portfolio:

No. 1: Earning potential. Perhaps the best reason to invest in commercial real estate is the earning potential. “Commercial properties can have an average annual return of the purchase price between 6% and 12% over a 5- or 10-year hold, which is a far greater yield than the annual return for other investment vehicles, which are generally 1% to 4%,” stressed Guglielmo.  

No. 2: Tax benefits. Investing in commercial real estate puts the investor in a position to claim deductions related to depreciation, interest expense, and other items to help defer the taxes on cash distributions. “For example, the IRS allows commercial real estate investors to deduct some of a property’s depreciated value to account for the cost of maintenance and upkeep,” noted Guglielmo. 

No. 3: Less volatility. The long-term rental arrangements common to commercial real estate helps reduce cash flow volatility. “Keep in mind that tenants often sign lease agreements for 3 to 5 years, and some leases even extend for several more years,” concluded Guglielmo. 

About Allied Commercial Real Estate 

Allied Commercial Real Estate is a full-service real estate brokerage company specializing in the sale and lease of real property in the Greater Southern California area. Its team of professionals provides acquisition, disposition, exchange, consulting and advisory services for nearly all property types. For more information, please call 909-786-4300, or visit http://alliedcommercialrealestate.com/. The office is located at 9327 Fairway View Place, Suite 300, Rancho Cucamonga, CA 91730. 

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