Scoring Methodology

MarketScreen uses a deterministic, transparent scoring model to evaluate rental real estate markets. Our goal is to answer one question: "Is this market worth my time?" We are NOT a listings app, deal underwriting tool, or prediction service.

What MarketScreen Does

  • Evaluates market-level fundamentals for long-term rental investing
  • Provides transparent, reproducible scores based on public data
  • Helps investors prioritize which markets to explore further
  • Offers clear explanations for every opinion we share

What MarketScreen Does NOT Do

  • Show property listings or specific deals
  • Underwrite individual deals or provide cap rate calculations
  • Predict future prices, rents, or appreciation
  • Guarantee investment returns or outcomes
  • Replace due diligence or local market expertise

Out of Scope (V1)

This initial version focuses exclusively on long-term rental (LTR) markets. The following are explicitly excluded from V1:

  • Short-term rentals (STR/Airbnb) - Different demand drivers, regulations, and seasonality
  • Medium-term rentals (MTR/furnished) - Hybrid model requiring different metrics
  • Commercial real estate - Entirely different fundamentals and data sources
  • Fix-and-flip markets - Requires appreciation forecasting, which we don't do

How Percentile Scoring Works

Instead of using raw numbers (which vary wildly between metrics), we convert each metric to a percentile rank. This tells you how a market compares to others on that specific measure.

What the numbers mean:

  • Percentile 90 = Better than 90% of markets (top 10%)
  • Percentile 75 = Better than 75% of markets (top quartile)
  • Percentile 50 = Right in the middle (average)
  • Percentile 25 = Better than only 25% of markets (bottom quartile)

For metrics where lower is better (like vacancy rate or unemployment), we flip the percentile so that a good performance always means a higher score.

Score Thresholds

85-100 Buyable

Market fundamentals strongly support rental investment at scale. These markets show favorable conditions across most categories.

Action: Worth serious exploration and deal sourcing

70-84 Conditional

Viable with careful deal selection, specific strategies, or local expertise. Some fundamentals are strong, others require attention.

Action: Proceed with extra due diligence on weak areas

0-69 Avoid

Market fundamentals don't currently support broad rental investment. This doesn't mean no deals exist, but the market works against you.

Action: Consider other markets unless you have specific edge

Investor Profiles

Profiles adjust how much weight each category receives. All profiles use the same data and scoring logic - only the emphasis changes.

Cash Flow Priority (Default)

Emphasizes immediate rental income, expense ratios, and rent-to-price metrics

Demand Demographics 15%
Employment Income 15%
Supply Risk 15%
Cashflow Reality 40%
Risk Flags 15%

Appreciation Priority

Emphasizes population growth, job markets, and demand signals over current cash flow

Demand Demographics 35%
Employment Income 25%
Supply Risk 15%
Cashflow Reality 10%
Risk Flags 15%

Scoring Categories

Demand & Demographics

25% baseline weight

Strong demand fundamentals indicate sustainable rental markets with consistent tenant pools.

Metrics Used:
  • Population Growth (5yr)
  • Renter Percentage
  • Household Formation Rate
High score means:

Growing population, healthy renter demand, active household formation

Low score means:

Stagnant or declining population, weak rental demand

Employment & Income

20% baseline weight

Employment stability drives rental demand and determines tenant quality.

Metrics Used:
  • Job Growth (3yr)
  • Median Household Income
  • Unemployment Rate
High score means:

Strong job growth, healthy incomes, low unemployment

Low score means:

Weak job market, lower incomes, higher unemployment risk

Supply Risk

15% baseline weight

Oversupply erodes rents; undersupply supports pricing power.

Metrics Used:
  • Building Permits per 1,000
  • Vacancy Rate
  • Months of Supply
High score means:

Manageable new construction, healthy absorption, tight inventory

Low score means:

Heavy development pipeline, high vacancy, excess supply

Cash Flow Reality

25% baseline weight

Real-world cash flow potential based on current market conditions.

Metrics Used:
  • Median Rent
  • Rent-to-Price Ratio
  • Rent Growth (1yr)
  • Typical Expense Ratio
High score means:

Strong rent-to-price ratios, growing rents, reasonable expenses

Low score means:

Poor cash flow metrics, high expenses relative to rents

Risk Flags

15% baseline weight

Structural risks that impact long-term profitability.

Metrics Used:
  • Property Tax Rate
  • Insurance Cost Index
  • Natural Disaster Risk
  • Crime Index
High score means:

Low taxes, reasonable insurance, minimal disaster/crime exposure

Low score means:

High carrying costs, significant risk exposure

Missing Data Handling

When data is unavailable, we assume average conditions and treat the uncertainty itself as a risk. Missing data does not remove a factor from consideration - the factor still exists in the real market.

  • Missing metrics are assigned a neutral 50th percentile (middle of the pack)
  • All category weights remain unchanged - no renormalization occurs
  • The percentage of score based on missing/estimated data is shown transparently
  • Material missing metrics (supply pipeline, crime, rent history) trigger uncertainty penalties in Risk Flags
Example: If crime data is missing, we assume average crime (50th percentile) AND apply a small penalty to Risk Flags because uncertainty about crime is itself a risk.

Data Sources

MarketScreen aggregates data from authoritative public and commercial sources. Each metric displays its source and as-of date for full transparency.

V1 uses representative mock data for demonstration. Production will integrate live data feeds.
Source Data Provided Update Frequency
U.S. Census Bureau (ACS) Demographics, population, housing characteristics Annual (1-year lag)
Bureau of Labor Statistics Employment, unemployment, job growth Monthly
HUD Fair Market Rents Rental benchmarks, housing data Annual
Zillow Research Rent indices, price data, growth rates Monthly
FEMA Risk Data Natural disaster risk zones Periodic updates
FBI UCR / NIBRS Crime statistics by area Annual

Data Freshness & Lag

Real estate data has inherent lag. We're transparent about this:

  • Census data: Typically 1-2 years old (most recent complete data)
  • Employment data: 1-2 months lag (BLS processing time)
  • Rent indices: 1-2 months lag (collection and aggregation)
  • Each metric shows its specific 'as of' date

Data freshness affects all market analysis tools equally. We show you exactly what date each metric represents.

Model Versioning & Validation

We track changes to our scoring methodology over time:

  • Every scoring run is saved with its model version and inputs
  • Weight changes are documented with rationale
  • Historical scores can be recalculated with new models for comparison
  • We do NOT make predictions - we analyze current and historical conditions

Future versions may adjust weights based on empirical analysis of which factors correlate with stable rental markets. Any changes will be fully documented.

Important: No Predictions

MarketScreen explicitly does NOT predict future performance. Our scores reflect current market conditions based on the most recent available data.

  • We don't forecast appreciation, rent growth, or price changes
  • Past performance and current conditions don't guarantee future results
  • Market conditions can change due to factors outside our data
  • Always conduct your own due diligence before investing

Use of News & Media

MarketScreen shows recent news articles related to each market for situational awareness only. This is strictly contextual information.

What News Is

  • Recent headlines from reputable sources (WSJ, Bloomberg, Reuters, local papers of record)
  • Displayed AFTER our scoring verdict, not before
  • Shown without editorial commentary, sentiment labels, or category tags
  • A convenience to help you stay informed about what's being discussed

What News Is NOT

  • News is NEVER used in our scoring calculations
  • Headlines do not influence weights, categories, or labels
  • We do not label news as positive or negative
  • News does not explain or justify our quantitative scores
Our Philosophy:

We believe in quantitative, deterministic analysis. Headlines can create narrative bias and encourage cherry-picking evidence. Our scores stand independently of current news cycles. The news widget exists purely to help you understand what others are discussing, not to influence your interpretation of our verdict.

Rental Ecosystem Maturity

The Rental Ecosystem Maturity indicator provides operational context about how developed and professionalized the rental investing infrastructure is in a given market.

What It Measures

  • How common rental/investor ownership is in the market
  • Availability of professional property management infrastructure
  • Prevalence of investor transaction activity

What It Does NOT Measure

  • Return potential or investment quality
  • Specific property manager or lender quality
  • Future market conditions or predictions

Data Proxies Used

Signal Description Source
Investor Ownership Penetration Percentage of housing units that are non-owner-occupied or investor-owned U.S. Census ACS
Property Management Density Number of property management firms per 1000 rental units State licensing data
Investor Transaction Share Percentage of residential transactions by non-owner-occupants CoreLogic, ATTOM

Maturity Labels

High Rental ownership and investor activity are common and professionally supported.
Moderate Rental investing is established but professional ecosystem still developing.
Low Rental investing is less common; professional support infrastructure is limited.
Indeterminate Insufficient data to assess rental ecosystem maturity.

This indicator provides operational context for rental investors and is not used to calculate MarketScreen's score or verdict. It reflects execution friction and market infrastructure, not return potential.