An investor looking for properties in Orlando asked to see only those with a school rating of 8 or higher. The thought was that areas with high test scores would have stable rental demand.

While that thought isn't completely wrong, filtering by just one rating can lead to missing out on many properties. The GreatSchools rating is calculated based on test scores, academic growth, and college readiness, each contributing 33% to the overall score. College readiness considers SAT and ACT results, four-year graduation rates, and participation rates in AP or dual enrollment courses. Recently, the weight of equity indicators reflecting the performance gap of disadvantaged students has increased. This means that all three indicators need to be relatively high for a high rating.

To elaborate on college readiness, it includes not only SAT and ACT results but also the participation rates in AP or dual enrollment courses. AP allows high school students to take college-level courses and exams, while dual enrollment enables students to earn community college credits while still in high school. The higher these rates, the better the college readiness score.

The equity indicator separately calculates the performance gap between disadvantaged student groups and those who are not. The smaller the gap, the higher the score, while a larger gap can lower the overall rating even if test scores are good. Recently, some schools have seen changes in their ratings due to the increased weight of this indicator.

When checking actual ratings within Orlando, the disparities are immediately apparent. Charter schools like Orlando Science Middle High Charter School, Lake Nona Middle School, and Pinecrest Preparatory Charter School all have a rating of 10. In contrast, William R Boone High School has a rating of 6, and Olympia High School has a rating of 5. If you filter for only those with a rating of 8 or higher, you will miss out on decent properties near these 6 and 5-rated schools.

In order, there are four main things to check. First, the trend of rating changes over the past 3-5 years. Whether the trend is upward or downward will affect future prospects. Second, the student-to-teacher ratio. While not reflected in the rating, it shows the actual classroom environment. Third, parent and student reviews. These can provide insight into the school atmosphere that test scores may not reveal. Fourth, a re-confirmation process to ensure that the property address corresponds to the assigned school on the school district's website. Considering these four factors along with the ratings will lead to much more accurate judgments.

To elaborate on the fourth item, you can check the actual assigned school by entering the exact street address into the school search tool on each county's education department website. The school names listed on real estate sites are for reference only, and it is always safer to base final confirmations on school district data.

Charter schools with a rating of 10 often operate on a lottery basis, so moving near such a school does not guarantee admission. Conversely, general public schools with mid-range ratings have guaranteed assignments, but their ratings tend to be lower. For investment purposes, schools with ratings in the 6-7 range that are trending upward may actually be worth considering.

This trend cannot be definitively stated to always rise, and the risk of rating changes should also be taken into account. Even if school ratings are used as a reference for predicting rental demand, it is safer to also consider the overall market prices and supply in the area. For investors coming from out of state to Orlando, it is also wise to factor in that Florida's property tax and insurance structures may differ from those in their previous states. Rather than filtering by just one rating, developing the habit of comparing multiple indicators is ultimately the shortcut to finding better properties. This article is not investment or legal advice, and it is recommended to consult with professionals before making any actual contracts.