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

The “regular” rental property you’re thinking of buying? It may not look like anything special here in 2026, but it could be worth tens or even hundreds of thousands of dollars more down the road—IF it has any of the high-upside qualities we’re about to show you. For the last 18 months, I’ve said that this is real estate investing’s era of “upside.” The “easy” real estate deals you could buy in 2015-2022 are long gone, and what we’re left with are a lot of seemingly unspectacular properties—but ones with hidden upside that is just waiting to be unearthed. A property with one of these qualities is unlikely to make you rich on its own. You’ve still got to focus on buying high-quality assets at good prices today. But if your property has two, three, or more of these “upside” opportunities, its value could skyrocket five, 10, or 20 years from now. This isn't just about market-driven appreciation. These are 10 distinct advantages that aren’t on most buyers’ minds when they’re looking for a simple deal that will cash flow, but thinking about them now could pay massive dividends in the future. In This Episode We Cover The 10 upside plays that can turn a “good” property into an all-time deal Value-add opportunities that can add hundreds of thousands of dollars in equity The huge advantages of owner-occupied strategies (not just better financing) How to identify properties that have zoning upside or lie in the path of progress Henry’s “free” land upside play that most real estate investors take for granted And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1316. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  The difference between a good deal and a great deal often comes down to one thing, upside. You could buy a property with solid cash flow and call it a win, or you could 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.

• 0:39Dave Meyer?

  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.

• 1:05Dave Meyer?

  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?

• 1:14Henry Washington?

  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?

• 1:27Dave Meyer?

  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% 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?

• 2:12Dave Meyer?

  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 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.

• 2:55Dave Meyer?

  Cause 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, you know, what upsides you think make the most sense for you right now? And I'll share what's working for me.

• 3:07Henry Washington?

  Let's do it.

• 3:08Dave Meyer?

  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's 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 know, 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. And it's a huge upside because there's just, 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 cash purchases.

• 3:53Dave Meyer?

  I actually think this is a really interesting one. I'm going to talk about that, but maybe putting more than 25% down if you can to secure an, I know, 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 water 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.

• 4:35Dave Meyer?

  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.

• 4:41Henry Washington?

  I think these are great. I actually have at least one more that I'd add, but also that one may, it may fit into one of these kind of order, but we'll talk about that as we go down the list. But looking at this list, I have a question for you on the very first one. I think rent growth is obviously something that happens. Neighborhoods increase in value. People want to live in certain areas. And so when there's more demand to live somewhere, rent can go up. There's tons of things that influence rent growth. But how does a beginner investor, maybe that's done zero to five deals? How do they look for what could be rent growth in the future without being speculative or overpaying for something in a neighborhood where they end up maybe not getting rent growth?

• 5:26Dave Meyer?

  Yeah, this is a great question. And I sort of teased it being a little bit negative about things. But this is the one, I think of the upsides I was bullish on a year and a half ago. Now I'm the least bullish on, just from like a macro perspective. But the quick answer is look at affordability and supply issues. Those are the main things. Like if there's a lot of oversupply, overbuilt, if you're in a place like Phoenix or Nashville or Orlando, like you're probably not going to see a lot of rent growth. The other thing is affordability, like affordability limits how much you can raise rent. And that should be there. Like people shouldn't be stretched. It's not good for you. It's not good for them. It's just bad for business. So those are the two constraints.

• 6:06Dave Meyer?

  But I would almost say for most people, the only way you should add rent growth as an upside right now, if it's around value add. If you are going to take a property that rents for 1,200 right now, and you're going to make that unit better, and then you're going to be able to rent it for 1,600, that's totally fine. Like that is an upside, but this idea that the markets get a give you rent growth right now? I think I would remove that. I like 10 as a round number though. So maybe your 10th that you're hinting at will replace it.

• 6:38Henry Washington?

  I mean, I think rent growth is something you can look for. It's just not guaranteed. So for me, when I think if I'm looking for a property where I think we might get rent growth, what I would be looking for is an area of town when there's, where there's more demand than supply. And it kind of fits in with number six. So something in the path of progress. Cause if it's in the path of progress, there may not be tons of people living there yet. But people are probably either living there or going to be living there in the near future. And that can help you get in now and then get rent growth in the future. But I've always found the best way to get like real rent growth is to force it through a value add.

• 7:20Dave Meyer?

  So maybe that's the amendment here to our upside is that you look for rent growth, but it has to be tied to one of the other upsides, which is either value add or the path of progress.

• 7:30Henry Washington?

  Well, I've actually got more questions for you. I have a big question around number two, which is value add, but I'm going to ask you right after a break. Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an STR for the year.

• 8:14Henry Washington?

  No furnishing required, making this the easy button to save five or six figures in taxes this year. And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777.

• 8:58Henry Washington?

  Again, text REI to 33777.

• 9:02Dave Meyer?

  Most investors only think about insurance when something goes wrong. A tenant injury, storm damage, loss of rent. Then suddenly the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance designed specifically for rental properties. Whether you own one property or a growing portfolio, they make it simple to get covered properly. And BiggerPockets Pro members get an extra 5% off their landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to get a quote today.

• 9:36Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven, if you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out. Get approved for the Aven card and you'll get a $400 statement credit

• 10:20Henry Washington?

  after spending $400 on your Aven card. Enough to cover your entire annual pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, NMLS number 2042345. Cards issued per 20 license from Visa USA, Inc. by Coastal Community Bank. NMLS number 462289. Member FDIC, equal housing lender, subject to approval. Terms apply. Visit aven.com for details.

• 10:41Speaker 02

  The action's on the court. And as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to U.S. residents 21 plus. Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 11:12Henry Washington?

  All right, we are back on the BiggerPockets podcast and we're talking about the era of upside and how to locate upside within a real estate deal. Dave has given us his 10 upsides that you can look for on almost any deal. I've quizzed him on number one, and now I've got a question on number two, which is value add. What are some of your favorite ways to add value or things that you look for when you're trying to identify a deal that breaks even or does a little bit of cash flow now, but has value add potential?

• 11:44Dave Meyer?

  I love a deal that cash flows today. And then I know that there's room to grow rent or room to push equity when it's convenient. And a lot of times, the convenient time is when the current tenants move out, or there's opportunities to put an ADU in the back, or there's a basement that's unfinished and that sometime in the future, I can add that value if it makes sense. You don't have to do all your value add upfront. Sometimes you buy a deal, it makes sense today, and you just kind of wait and see if value add makes sense in the future, a year or two or five years down the line. And so I just like looking for things like big lots,

• 12:25Dave Meyer?

  large square footage, extra bedrooms that you can convert, or sort of like utility spaces that you can convert. Those are the things personally I like because those are what drive up rents and equity.

• 12:37Henry Washington?

  The short-term value add things that I'm looking for are easy ways to convert non-bedroom space to bedroom space.

• 12:45Dave Meyer?

  Yep.

• 12:45Henry Washington?

  Bedrooms equal more rent. In some markets, you can get a higher ARV. For the most part, it's still heated and cooled square footage, so you're not going to get a ton of bump that way, but you will get rent bump.

• 12:55Dave Meyer?

  Yeah.

• 12:55Henry Washington?

  So I'm looking for those on the short term. I'm looking for things like homes with no true primary suite, where there is a big bathroom somewhere close. So maybe I can just split that bathroom into two and create an access point from the primary bedroom, or homes that need an additional bathroom and they're on crawl space. So like, I know I can inexpensively create a bathroom space because there's a crawl space. So these are all things that I'm like, I look for this that I can do in the short term. When I buy this house, I can renovate it, I can add the value for those things. And then I can capitalize on that by renting it for more, or selling it for more as a flip. And then I have a bucket of what are some of the more

• 13:37Henry Washington?

  longer-term value add things. And for me, those are lots that allow you to have like an ADU, or potential for bringing in, you know, modular homes and putting them on the land, like if it's zoned appropriately, properties that are in opportunity zones where you can do a little bit of extra building and potentially get some benefits for that. But I think where people get in trouble is they try to buy a property where they have to do that tier two value add in order for the deal to make any sense at all.

• 14:10Dave Meyer?

  Yeah.

• 14:10Henry Washington?

  In other words, they have to buy the property, they've got to renovate the main house, fully renovate that, get that rented out, and build an ADU and get that rented out for it to actually cash flow. And I think that that's where people get in trouble. So that's why I kind of bucket it in two tiers. There's stuff I want, I need to do now, that I can do quickly and inexpensively to add value. And then there's stuff that's like, that could be cool in the future, and it could make me a ton of money later, but I don't want to have to do it. I want it to be icing on the cake.

• 14:37Dave Meyer?

  For me, like the combination of like, value add, zoning, upside, plus path of progress is like the sweet spot, because then you buy something that's like cash flowing today, and like, maybe the rents aren't, it's not worth updating the kitchen and the bathroom right now, because you're not going to get better rents. But if the path of progress upside hits, then you do the value add, then you do the ADU, like then it turns into this whole thing, where you can make it like massive, like this can go from a good deal to an amazing deal. That's kind of the whole idea behind this framework is like, don't go buy something bad today. Like, it has to make sense today. But like, when you're buying a deal, you should be thinking

• 15:19Dave Meyer?

  about like, if things go well, what are options two, three, four, or five for me to make this go incredibly well, and to turn this into a once in a lifetime kind of thing?

• 15:30Henry Washington?

  All right, that's really cool. I totally agree with you on that. Another one I have a question on is owner occupied. How do you see owner occupied as a upside?

• 15:41Dave Meyer?

  Oh, this one I love. Doing an owner occupied strategy. So honestly, it works either way. You're either doing a house hack where you're living in one part, renting out the others, or even doing a live-in flip. I think it's perfect for the upside era, because it buys you time. Like, in this kind of era, if you want to figure out how to make the most money out of this property, you're living in the property. There's no urgency to it, right? That, which is my favorite part of this. Like, I'm living in a house that I'm living in flip. I decided to take a year off and not do the renovation. It's no problem. I still know this is a great property. I still bought it at a good price. It still has a great ARV, but it's just allowing me more time to figure out exactly how I want to optimize this property. Same thing

• 16:26Dave Meyer?

  goes with a rental property. You can move into a house hack and opportunistically renovate properties for it, what, when you have time. You're going to be living there, right? Like, so someone moves out, you could do the turns yourself, you could do the value add, you could DIY some improvements to the property. It just makes it so easy to optimize an investing strategy for your property over two or three years. And I know people want to house hack every year. If you can do that, great. But like, you don't have to. And if you want to just like, take your time and make one property excellent, which works, by the way, like, buying the right deal and just focusing on that and making it an excellent performer, owner occupied is such a good way to go about that.

• 17:10Henry Washington?

  Yeah, the pressure is kind of off with an owner occupied deal because of the loan that you get to use to get in the property. You're getting 30-year fixed rate debt typically. It's a more affordable, lower down payment. And if you're at a place where you feel like, hey, if I move out now, I probably can't get the rent that makes sense for me. Well, guess what? You just don't have to move.

• 17:33Dave Meyer?

  Exactly. Exactly. Yes. Wait it out, for sure. That makes total sense.

• 17:38Henry Washington?

  Another one on the list I did want to ask you about, mostly because I'm jealous, because it doesn't work in my market. But a lot of people are doing it and making great money doing it, which is the rent by the room upside. This, I mean, people are bringing in, you know, tons of cash flow, $700, $800, $900 per bedroom in certain markets, in certain areas, in certain kinds of houses. But it doesn't work everywhere. So when does it make sense for you to think about this as like a value add opportunity? Because yeah, anybody can add bedrooms and try to rent a house by the room, but that doesn't mean it's going to work.

• 18:18Dave Meyer?

  Totally. In this framework of upside, it's an option for how to manage a great asset. And I think this is the same thing. I see it the same way as short-term rentals and midterm rentals. Those are all options for how you manage an asset. You have to buy a good asset that works, I think, ideally, in the most basic, highest demand thing, which is long-term rental. If you are in an area that this works, it can take what is a good, long-term rental into an amazing like cash flow monster. Like, that's why I see it as an upside, not as its own strategy.

• 18:58Dave Meyer?

  I've never done rent by the room, so just to be clear, but like, even if I did one or two of these, I would never say like, I'm a rent by the room investor. I'd say I'm a long-term real estate investor. I buy great assets, and then I figure out the right way to manage them, given current market conditions. And rent by the room is a tool that you can do to manage it.

• 19:17Henry Washington?

  Yeah, I think what people should be focused on, and I think it's kind of what you've been saying the entire episode, is like, you want the deal to break even or cash flow as is, as a long-term rental right now. And then you can take advantage of the upside if this house is in a neighborhood in a market where rent by the room works. So instead of you just making your two, 300 bucks a month cash flow, you go ahead and do the rent by the room strategy, and you bump that up to $2,000 a month cash flow.

• 19:48Dave Meyer?

  Yeah.

• 19:48Henry Washington?

  Because you've got the upside. But if something out of your control changes, like they change the rules of the zoning laws, or something backfires and you can't do it, then you're just back to making your two or 300 bucks a month cash flow. It's still a good deal.

• 20:01Dave Meyer?

  I think it's the same thing for short-term rentals these days, too. Like, this is just the way to do it.

• 20:06Henry Washington?

  All right, we're on the same page there. But I think I have one strategy to add to your upside list.

• 20:13Dave Meyer?

  Yes, I want to hear about this.

• 20:16Henry Washington?

  All right, here it is. I'll tell you about it right after the break.

• 20:20Dave Meyer?

  Oh.

• 20:23Dave Meyer?

  You know, when I first started sharing my real estate journeys online, I didn't have a website. I had a spreadsheet, an Instagram account, and no idea how they'd ever connect. I remember thinking a real website was going to cost me thousands of dollars and take a developer weeks to build. So I kept putting it off. Then I found Hostinger. I typed in what I wanted, a site to show off my deals, share my story and capture leads. And their AI builder had a working version live in minutes. No code, no designer, no developer needed. And it didn't stop at launch. Once my site was live, Hostinger's AI agent helped me figure out what to try next.

• 21:03Dave Meyer?

  Acting like a built-in team of specialists for SEO, website copy, email marketing, and more. Domain, website, email, marketing, one Hostinger account covers it all. So you're not stitching together five subscriptions or wondering if they even talk to each other. Plans start at just $3 a month, so you can begin at your own pace and build from there. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/realestate and use code REALESTATE for 10% off now.

• 21:36Henry Washington?

  Buy smart, drive for less, and trade for more. That's Toyota affordability. And it all starts with a great deal from your local Toyota dealer. Make a smart buy on an all-wheel-drive Camry, Corolla Cross, or get a Corolla sedan packed with the latest features, advanced tech, and head-turning style. Take a test drive in two of Toyota's most popular SUVs, the spacious, family-friendly Grand Highlander and adventure-ready RAV4. And with so many hybrid and plug-in hybrid models available across the lineup, plus efficient all-electrics like the BZ, BZ Woodland, and all-wheel-drive CHR, you can drive your way and skip the pump. And long after you leave the lot, your Toyota keeps delivering with legendary resale value built on a reputation for quality and reliability.

• 22:21Henry Washington?

  So when it's time for your next Toyota, you could trade in for more from a great deal today to a great value tomorrow. A Toyota is right for you. Shop toyota.com for deals and details, or stop by your local Toyota dealer today. Toyota, let's go places.

• 22:36Dave Meyer?

  I just booked a ski trip to Park City, and I've already got the whole thing planned out. Five days, first tracks every morning before the crowds show up, my knees reminding me I'm not 25 anymore by the second run, and an embarrassing number of overpriced burritos at the lodge. I don't even care. This is the trip I look forward to all year. But here's the part I actually appreciate. The practical side of my brain kicking in is that my place doesn't have to just sit there empty the whole time I'm away. I can list my space on Airbnb and bring in a little extra income while I'm out getting humbled on a mountain. And with the co-host network, I'm not the one handling all of it. You can partner with a vetted local co-host who can create

• 23:21Dave Meyer?

  your listing, manage reservations, message guests, and even handle the styling. So I get to fully focus on my trip, and my place is still working for me the whole time. Find a co-host at airbnb.com/host. Investing in real estate has always been smart, but it hasn't always been simple. Now it's both, thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low-fee access to blue-chip private market real estate. Today, the Fundrise Flagship Fund has grown to manage more than $1 billion of real estate on behalf of hundreds of thousands of investors, making it one of the largest funds of its kind.

• 24:03Dave Meyer?

  For those who believe real estate has an important role to play in their portfolio strategy, the Fundrise Flagship Fund has positioned itself as both a simple and a smart option. Whether you're starting with $10 or $10,000, the Fundrise Flagship Fund makes adding real estate's unique potential for both passive income and consistent growth. Just visit fundrise.com/pockets to make your first investment today. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at fundrise.com/flagship. This is a paid advertisement.

• 24:45Speaker 02

  The action's on the court, and as the official beer sponsor of the NBA, Michelob Ultra is getting fans closer to the game with a chance to win courtside seats, merch, and more. Visit michelobultra.com/courtside to enter. Michelob Ultra Courtside, 26 to 27. No purchase necessary. Open to U.S. residents 21+. Begins on October 1st, 2026 and ends on June 30th, 2027. Multiple entry periods. See official rules at michelobultra.com/courtside for free entry, entry deadlines, prizes, and details.

• 25:16Henry Washington?

  All right, Dave and I are back on the BiggerPockets Podcast, and we are talking about investing in the era of upside. How to find properties that make money from day one. Maybe they break even, maybe they make a little bit of cash flow, but they also have potential upside, which is a way for these properties to turn from a good deal to a great deal maybe later on down the road. We've already talked about things like rent growth, value add, rent by the room. And now I have one that I think I can add to this list because I just executed it, and I've done it many times in the past.

• 25:56Henry Washington?

  I like to buy houses on big lots or with multiple acres or that already have two separate lots, and then I like to monetize the extra lot. Because the way I structure it is I essentially get the land for free.

• 26:14Dave Meyer?

  Yeah.

• 26:14Henry Washington?

  And so as an example, I just did a flip. I bought a house on four and a half acres, and the ARV of the house was $350,000.

• 26:26Dave Meyer?

  Okay.

• 26:26Henry Washington?

  We renovated the house, and then I was like, well, it's got four and a half acres, and only about three acres were clear. And then there was another acre and a half that was wooded. And so whoever bought this land was probably going to do nothing with the wooded acre and a half anyway.

• 26:45Dave Meyer?

  Right.

• 26:45Henry Washington?

  And so I called the city and said, can I split this lot into two? And I could essentially have the three acres on one lot with the house with the clear land, and then an acre and a half of that wooded land. And they said, yes. So I spent about $3,000. We got a survey. We did it all on paper, and I split that lot. And so, once we renovated the house, I spent about 80 grand on the renovation. We sold the house for $345,000.

• 27:13Dave Meyer?

  So you still hit your ARV. It didn't like change the ARV?

• 27:15Henry Washington?

  Didn't change the ARV. I made about $90,000 on the flip, which is what we're planning to make. But here's the upside. I then sold that acre and a half separately to a completely different buyer for $75,000.

• 27:28Dave Meyer?

  Yeah, that's so good.

• 27:30Henry Washington?

  So I made an additional $75,000, $75,000 of upside on that deal.

• 27:35Dave Meyer?

  Killer.

• 27:35Henry Washington?

  And all I had to do was separate the lot. And I've done this multiple times. I love this land play.

• 27:40Dave Meyer?

  That's a great move. It is an upside. You didn't have to do it. Like, if you didn't sell that separate lot, still would have made a ton of money.

• 27:48Henry Washington?

  Absolutely. So yeah, this could get its own place on the list. I'm not sure what we would call it, but I've done it where we split lots. I've done it where we bought a house and it came with the lot next to it. But I call it, it's how I get land for free. Essentially, I sold an acre and a half of land for 100% profit because I technically owned it free and clear because it didn't affect my ARV on the flip.

• 28:15Dave Meyer?

  Yeah, I like it. What are we calling it? Splitting lots? Free land for free?

• 28:20Henry Washington?

  Yeah, the free land upside.

• 28:22Dave Meyer?

  Free land upside, the flu. Okay.

• 28:24Henry Washington?

  The flu.

• 28:28Dave Meyer?

  That's what it is. Anyone else doing the flu, let us know.

• 28:31Henry Washington?

  Anybody else doing the flu investing method? I don't know if that was gonna-

• 28:35Dave Meyer?

  We're not the best branders.

• 28:36Henry Washington?

  I don't know if that was gonna stick like Bird did.

• 28:41Dave Meyer?

  Henry's giving everyone the flu, everyone.

• 28:46Dave Meyer?

  Really popular. No, I like that one a lot. Well, I think these ones are great. You know, we've talked a little bit about rent growth. Now we have a new one. We talked about owner-occupied value add. Let's talk about path to progress, though, Henry, because this is a big one. And I think it works in every market. Because if you look at today, people are like, oh, the market stinks. It's like, well, national- Average, some areas are still booming, right? Some areas are still growing. How do you find those?

• 29:11Henry Washington?

  Here are some things that I like to look for when I'm considering path of progress. First and foremost is you don't have to be an expert in understanding like city infrastructure and where things are going. There's tons of other companies and people whose jobs it is are to do that already. And you can just go see what they're doing and try to follow suit. So some people call it the Chick-fil-A method. Some people call it the Home Depot Lowe's method, but like they only build Chick-fil-A's in the path of progress, right? They have an entire team of people in their real estate department whose job it is, is to go and figure out where cities are progressing. So you can go on their website and see where they're opening stores.

• 29:55Henry Washington?

  And if they're opening them in your area, that's probably going to be in what they think is the path of progress. Is it a foolproof plan? No, but it's a pretty good one. They probably know more than you do about researching your city. So one thing to think about. Another thing is Home Depot, Lowe's, Menards, cities will give these stores tax breaks or incentives for opening up new stores in areas of town where that city is expanding and building so that people have a place to go and get supplies that isn't out of the too far off the beaten path. And so one hack that I've told people before, I've mentioned on the show several times

• 30:34Henry Washington?

  is to go and buy one stock of Home Depot, Lowe's, Menards, any of these big box stores. And what that does is it gets you on their shareholders list. They start to send you the shareholders packages or you can go on their like corporate website at that point and get access to the corporate website where they literally show you where they're opening stores. And so you can see if they're opening any in your area and that might be the next area for you to go and research. I'm not saying if they're opening a store, go buy property there. I'm saying if they're opening a store there, go start doing some additional deep dive research and figure out, is this a great place in the path of progress that you can start buying homes? And then the other things, things that nobody does that everybody can do is you can literally

• 31:18Henry Washington?

  go online and look up your city planning department meeting schedule and you can see who's on the schedule, what they're talking about. They typically make people submit their documentation for the things they're asking permission to build prior to the meeting. So you can go and review all the documentation and you can see who's building what in your area. What are they, what are they trying to get permission to build or develop in your neck of the woods? And you can learn a lot about what the immediate path of progress is by seeing what the city planning department is approving or not approving on a week to week basis. And you can go to the meetings.

• 31:57Dave Meyer?

  Yep, totally. That's how I found my one off market deal. It's also how I've looked for on market deals too. It just makes sense to do this. It's such an easy hack that no one does. No one does it. It's so easy though, like even download the minutes, put in chat GPT and be like, what's going on?

• 32:13Henry Washington?

  What's happening?

• 32:14Dave Meyer?

  It's, yeah, it's so easy. Please go do this. All right, well, we've talked about a lot of the upsides here, really good ones here. Again, we had 11 overall, but the goal here is to not go all in on one of them. I actually think the best framework here is to look for two or three of these because you don't know exactly what you're going to use. Again, as Henry said, the idea is to give yourself options. And so if you have two or three of these upsides, you have multiple options to better monetize your deals in the future. So whether it's rent growth, value add, owner occupied, zoning, path of progress, the free land strategy, buying deep, learning, all of these things are good. Look for deals that make sense today.

• 32:55Dave Meyer?

  They at least break even, offer you a little bit of cash flow today for a rental perspective. You know, that doesn't need to be day one, as Henry said, like that might be after stabilization, right? That it's working after stabilization and then you have this long-term benefit that you get to grow into and you get to be patient and you get to do opportunistically when it makes sense for you, when the market is giving you what you need to pull off these strategies, that's the whole idea. So hopefully y'all learned something from this, but please share your upsides with us. If you think there are ones that are working well today that, that you want to share with the rest of the bigger pockets community. If you think that we missed one and there's an upside, long-term benefit to real estate that we don't know, let us know in the comments. We would love to hear from you.

• 33:40Dave Meyer?

  Henry, thanks for asking these questions, adding to the framework. It's always great to have you here.

• 33:45Henry Washington?

  Thank you so much. Yeah. And if y'all are listening and you're killing it with an upside that we didn't mention, apply to be on the show. Go to biggerpockets.com/guest and apply to be on the show. We'd love to hear about it, potentially even talk to you about it so that Dave and I can learn how to do it and make a bunch of, I mean, so that we can educate the community on ways that they can continue to invest in real estate.

• 34:03Dave Meyer?

  Yeah, yeah, yeah, totally for everyone else.

• 34:07Dave Meyer?

  All right. Thanks, everyone. That's our show for today. Thanks for listening to this episode of the BiggerPockets Podcast. We'll see you next time.

• 34:14Speaker 03

  Hey, Bo's here. On your next track, listen for the decisions. Distortion on the bass, the vocal right up front. Every choice deliberate. With Bo's, you'll hear it all. Your music deserves Bo's.

• 34:30Speaker 04

  Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill-up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.