When is it safe to start investing in the Arizona real estate market? That depends on your strategy. There are advantages to investing in a real estate market that has hit bottom or just before or after the "true bottom." Does anyone truly know where the bottom is? The only way to know for sure is when it's on the way up.

The best way to insure safety in the market is to choose the type of investment to best fits your specific needs. You will want to determine the amount of time you plan on having your money and time invested, the amount of money you have to invest, cash versus financing, the best type of property, and the level of risk that's acceptable to you.

If your investment goals are to buy and hold for income and future appreciation, The safest time to invest is when market values are within 5% of "hitting bottom". I use 5% as a safe number because you will never truly be able to gauge the exact bottom until it is on it's way up. 5% on either side of the market bottoming out is safe because it equals the same price whether it is obtained today or three months from now. Of course this only applies to holding long term. Based on current market conditions the buy and hold period should be a minimum of 5 years with 10 years being optimal for appreciation. The Phoenix market is ideally positioned for this type of investment right now.

If you're interested in a "fix and flip" investment scenario, buying just after the bottom of the market has occurred is the safest time. Investing prior to the bottom can be profitable but you will want to be sure the market is not declining at a fast pace. Many people were caught in this part of the cycle in 2007 and 2008. Depreciation can still occur in small increments even when the market is almost level or at bottom. You will want to pay special attention to existing homes on the market including bank owned and short sale property. The law of supply and demand certainly applies to real estate in this scenario and inventory levels are more critical when you are buying and selling in a short period of time. Your goal for acquisition and disposition of this type of investment property should be a maximum of 90 days. Market timing is critical when buying and selling in the short term. There are opportunities to profit from investing in the Phoenix market right now but it must be approached with diligence and caution.

Once a market hits bottom it makes sense for investors to buy. There is a point where value is clear, and property makes sense as an investment thus stimulating sales. Homes in the lower price ranges now make sense for our investors and first-time homebuyers. The Phoenix market offers great value for move-up buyers also. Low interest rates also entice buyers to move forward. Short sales will continue to have a factor in our market for years to come. Luxury homes and commercial properties will still see adjustments in value in the coming months.

The wholesale market is strong right now with local and international investors purchasing trustee sales and bank owned properties. This business model works well for investors that are buying to hold long term and they are experiencing great returns they can not realize in the stock market or money markets. Self directed IRA's are a popular tool again to fund real estate investments. There are opportunities in every market if you keep a careful eye on the trends and inventory.