What can be inferred about properties with strong income potential?

Properties with strong income potential are often located in high-demand areas. This is because high-demand locations typically attract more tenants or buyers, increasing the likelihood of consistent rental income or property appreciation. Areas with strong economic growth, good schools, proximity to amenities, and low crime rates generally see more demand, which can lead to higher occupancy rates and potentially increased rent prices.

While it might seem intuitive that newly constructed properties, lower operational costs, and minimal expenses contribute to strong income potential, these factors alone do not guarantee income strength. A property in a low-demand area with low operational costs may still struggle to generate income compared to a well-located property that incurs higher operational expenses but has a large tenant pool. Thus, the relationship between location and income potential is a critical consideration in property appraisal and investment.