Real Estate Valuation Methods

Jane is a portfolio manager evaluating a potential investment in a commercial real estate property. She is considering three different valuation techniques: the Sales Comparison Approach, the Income Approach, and the Cost Approach. Jane understands that using appropriate valuation methods is crucial for accurate investment analysis.

For a property that generates steady rental income, she is particularly keen on understanding how the Income Approach can provide a realistic estimate of the property's value. However, she also realizes that different methods may yield varying results based on the underlying assumptions and local market conditions.

Which of the following statements about these valuation methods is correct?