Valuation Methods in Real Estate Investment

Marina Holdings, a real estate investment firm, is evaluating several residential properties for acquisition. The firm utilizes a variety of valuation methods to determine the fair value of its potential investments. One of the properties under consideration is located in a rapidly developing area, and the firm is aware of variances in capitalization rates due to investor sentiment and local market conditions.

Given this context, which valuation method is most suitable for accurately reflecting the income potential of the property while considering the local market fluctuations?