Like the stock market, the real estate market is cyclical. There are good times when demand and prices are soaring, but there are also bad times when values fall and demand falters, with periods in between.

Very rarely will the market offer perfect conditions for investing. Smart real estate investors know that the key to successfully investing, no matter what the market is doing, is to do these four things. 

1. Invest in income

Real estate investing has a lot of benefits. Tax advantages, property values appreciating over time, and leverage are a few -- but none can trump the power of passive income.

Whether it's earned from dividend payments through a real estate investment trust (REIT) or rental income from a rental property, passive income has incredible wealth-building power when held for the long term because rental rates and dividends often grow over time.

Buying properties or REITs that have solid income-earning potential today with growth opportunities in the future means your returns are likely to compound over time. It also leaves you in the clear if values falter temporarily because the goal of the investment is income first.

Other advantages such as growth should be looked at as an added benefit, with income as the primary goal of investing. 

2. Shop for discounts

Buying at market value isn't bad, but a discount is definitely better. Value investing increases your chances for a superior return down the road and reduces risk in the event of market volatility. Every market, no matter the conditions, still has discounted buying opportunities. 

Single family homes are selling for the highest median price in record, with several red hot markets like Austin, Boise, or Pheonix being considered overvalued. Commercial real estate (CRE) isn't too far behind, with cap rates, a valuation metric used for CRE, consistently declining over the past few years -- meaning certain asset classes like multifamily and industrial are rather richly valued.  Instead of sitting on the sidelines, smart investors know to shop for discounts in the stock market, which has loads of REITs on sale right now. Prologis (PLD -0.84%) is an industrial REIT and one of the largest REITs by market cap, and is down 18% despite fantastic recent earnings and long-term growth ahead. Federal Realty Trust (FRT -0.60%) is another REIT that is down around 18% and has maintained an impressive record with 54 years of dividend increases and a high-quality portfolio of outdoor shopping centers. 

Smart investors know how to find discounted buys and ensure they aren't overpaying for an investment. You just might have to hunt a little harder for a bargain in high-priced markets with robust demand and active investor participation. 

3. Evaluate carefully

There are so many factors to consider in an investment, such as current operations, debt exposure, management, supply and demand, condition of the asset, potential income, and growth opportunities. It's extremely important to take all of these factors into consideration before investing and carefully run your numbers to make sure the investment makes sense not just today but in any market.

If you buy an investment in a period of high growth, it's easy to assume things will stay the course. But demand changes, values can fall, management can make poor choices, and tenants can fall behind on their rent. Unexpected things happen and smart investors know to plan and prepare for these things when they evaluate the investment upfront.

4. Hold long term

Smart investors invest for the long haul. They take a long-term approach to investing to maximize the investment's potential returns and benefits of the investment. It also means their investments aren't as susceptible to the ups and downs of market swings because they have time on their side and can wait to sell when the market is favorable.

Don't wait for conditions to be perfect, they rarely are. Rather follow these four simple but smart steps to help you make the most of investing in any market.