How to survive the bust. Buy, sell, rent, move, or wait it out?

Investors can still make money -- good money -- in a contracting market, but it requires that you not simply follow the herd. I think it is safe to say that in the coming year, a few basic principles for real estate investment will hold true:

Know your market. The more you know, the less likely you are to get caught up in someone else’s fervor -- or someone else’s panic.

The market won’t rescue you from a bad investment. If you’re buying an income property like an apartment building, buy it for today’s net cash flow. If you’re buying a home, plan on living in it for at least five years.

Add value. Real estate is not a passive investment, though you would never know it from the way some landlords behave. Improving your properties and the neighborhood is the best way to protect yourself from the ups and downs of the market. There is never a glut of great buildings in great neighborhoods.

Breathe. This too shall pass.