You’ve heard the old adage: Buy low and sell high. This is the intention of everyone who buys any investment. But, unfortunately, for most of us, we too often miss the opportunity and end up buying high and then selling low.

Why is that? Because very often we are driven by either greed or fear or both. When a market is increasing, we are afraid that we will miss the opportunity and so we buy before the market gets so high that we can no longer afford to buy. When a market is decreasing, we sell because we want to lock in whatever we may have before we lose it all. Sometimes we are looking so hard for the easy money that we neglect to adequately look at the opportunity costs of our decisions.

Real estate is, and always has been, a long term investment. Although in the recent past, one could purchase a home and sell it a few years later and make a sizeable profit, real estate investments typically require several years of maturity in order to produce acceptable yields. Today, real estate still offers a variety of tax incentives not available with other investments, and has the added benefit of being the cornerstone of one’s financial well-being. After all, you are still purchasing a house for someone—will it be for yourself or your landlord?

Several years ago, when the real estate market was increasing, people would often ask if it was the best time to buy. Inventory was low, mortgage rates were low, loans were relatively easy to get and homes were commanding the highest prices in history. Renters were taking advantage of the opportunity of owning their own homes. The media reported increasing prices and people expected to make large returns on their investments.

Today, inventory is high. Many investors have decided to sell. Many bank-owned homes are on the market. Mortgage rates are low. Home prices have dropped. People with good FICO scores can get favorable loans. The media continues to report declining sales and lower prices, causing the concern that if one doesn’t get out now, one will lose any gain realized over the past few years. Very few people are asking if this is the best time to buy.

Avoiding the herd mentality and doing the opposite of what everyone else is doing allows the astute investor to take advantage of opportunities the crowd doesn’t see. It takes guts to do that which others will not do. Homes are on “special”. Some rental properties have positive cash flow for the first time in several years. High inventory allows for greater choices. Whether you have thought about purchasing your first home or a second home, talk with your professional REALTORâ. He or she can help you determine how much house you can afford, whether home ownership fits your investment goals, and can guide you toward successful home ownership.