Which aspect is crucial for determining potential gross income?

The level of tenant demand in the market is crucial for determining potential gross income because it directly influences rental rates and occupancy levels. When there is high demand for rental properties in a given area, landlords can charge higher rents and are more likely to maintain full occupancy. This demand can stem from various factors such as economic growth, job availability, and demographic trends that make an area attractive to renters.

Understanding tenant demand allows property owners and consultants to make informed predictions about the potential income they can generate from their properties. If demand is low, it may pressure landlords to lower rents or offer incentives, which would negatively affect potential gross income. Conversely, strong demand can lead to higher occupancy rates and rental income, enhancing overall revenue projections. Thus, it's this dynamic between supply and demand in the real estate market that underpins potential gross income calculations.