Underimproved land indicates what about the property's income potential?

The concept of underimproved land refers to properties that are not fully utilizing their potential to generate income. This situation typically arises when the existing improvements on the land—such as buildings or infrastructure—are insufficient or inadequate compared to what could be constructed or developed on that site.

When a property is deemed underimproved, it signifies that there is an opportunity for enhancement, which could come from further development, renovation, or modernization. Maximum income potential suggests that if the land were developed or improved to its highest and best use, it could yield significantly more income than it currently does. This understanding aligns with real estate valuation principles that emphasize maximizing the utility and income-generating capabilities of a property based on its location and characteristics.

Other options do not accurately capture the essence of underimproved land. While it may generate little to no income or see an increase in future value if properly improved, the core focus with underimproved land is the gap between current income levels and the maximum potential income that could be achieved through additional investment or improvement.