10 “Hidden” Signs of a High-Upside Rental Property (Buy These in 2026)

**Dave Meyer** (0:00)
The difference between a good deal and a great deal often comes down to one thing, upside. You can buy a property with solid cash flow and call it a win, or you can buy a property with solid cash flow and hit an upside, like rent growth, value add opportunities, being in the path of progress. And these can turn it into an equity monster over the next few years. So today, we're breaking down the upsides that separate average properties from deal of a lifetime opportunities. Some of these are obvious, but the best ones often require a little bit of digging. I've been calling this the upside era for a year and a half now, but the market has shifted. So today, we're going to share which upsides are working best for us and a few new ones we're looking for. By the end of this episode, you'll know exactly what to hunt for when you're analyzing deals for almost any strategy and in any market.
Hey, what's up, everyone? I'm Dave Meyer, Chief Investment Officer at BiggerPockets, and I'm here with my co-host, Henry Washington.
Henry, what's going on, man?

**Henry Washington** (1:14)
What's up, buddy? Good to be here. Love talking about deals, so this is right up my alley. But I have a question for you. You've been talking a lot about this upside era in real estate. Why don't you define that for the people listening?

**Dave Meyer** (1:27)
I mean, I came up with this concept like a year and a half ago, because we basically from 2015 to 2022, we're in this era where deals were really, really obvious. Like you could go out and find something on the market or maybe off market, and it would either cash flow right away or you could do a burr and get 100 percent of your money out. And we're not in that era anymore. And the big difference for me right now is that you have to buy deals that the obvious huge gains that you might get might not be in day one or week one or month one. It might be a little bit down the road. And so the framework I've been using at least is like, how do you buy a deal today that is good?
And then you have two or three upside potentials that could play out over the next. It could be three months. It could be three years. But you give yourself a shot to take this deal and turn it from a good one to an amazing one. And frankly, even though we're talking to this upside era, this has kind of always been the way real estate works, except for these like magical years from 2015 to 2022 So I think we're just getting back to this idea where you need to look for the long term benefits of your deals, not just like what's working in the first day of ownership. And so I actually originally when I came up with this framework, came up with 10 upsides, but I think they need updating, because like this was already a year and a half ago, and things have changed. So maybe we could just talk through like what has changed, and then what upsides you think make the most sense for you right now, and I'll share what's working for me.

**Henry Washington** (3:07)
Let's do it.

**Dave Meyer** (3:08)
So here are the 10 upsides. And again, at least my framework for buying a rental right now is buy something that cash flows today. It's a good deal today.
Target two to three of these 10 upsides. You don't need all of them. You're never going to be able to get all of them. The idea is to get two or three on every deal. So here are the ones that we had. One is rent growth. That's a great way to take a deal. If rents are going to grow, amazing. Two, obvious value add. You're buying a property. Maybe it's good today. You fix it up. It's even better. That's an obvious one. Three, owner-occupied strategies work very well right now. It's a huge upside because it gives you so much flexibility. Four is rent by the room, trying to do the co-living model. It's a great way to maximize cash flow. Five, lower LTV or catch purchases. I actually think this is a really interesting one. I'm going to talk about that, but maybe putting more than 25 percent down if you can.
To secure an asset that will cash flow in the future or that you really like.
Six is path of progress, which is just being in a great neighborhood where things outside of your control can help bring up the value of your property. Seven, one of my personal favorites is zoning upside, being able to add capacity to an existing lotter unit. Number eight, I'm going to ping you on this one, Henry, is buying deep, just a great way to really earn equity over the long run. Number nine is create a finance and seller finance. And number 10, this one is controversial, but I think is learning. I think if you buy a deal that's good today and you learn a lot, that makes it a great deal. So those are the 10 I got.