Which of the following is included in the steps of the Income Approach?

The Income Approach to property valuation is primarily focused on the income-generating potential of a property, especially in the context of investment properties. One of the critical steps in this approach is estimating potential gross income, which involves determining the total income a property could generate if fully leased, before any operating expenses are deducted.

This step is crucial because it sets the foundation for calculating net operating income and ultimately determining the property's value based on its income streams. By accurately estimating potential gross income, an assessor can provide a clear picture of the property's economic performance, which is vital for making informed valuation decisions.

In contrast, while estimating depreciation costs, calculating neighborhood demographics, and assessing raw material costs are important aspects of property analysis and valuation, they do not directly pertain to the specific steps involved in the Income Approach. The primary focus remains on income potential rather than those other factors, which primarily apply to other valuation methodologies or considerations.