Valuation Methods in Real Estate Investments

As a real estate analyst, you are tasked with valuing a commercial property that is currently generating steady rental income. The expected net operating income (NOI) for the property is projected to be $150,000 per year, and the property is located in an area with a capitalization rate of 8%. The owner is considering selling the property and wants your recommendation on the most suitable valuation method for this type of asset.

Discuss the different valuation methods available for real estate investments, including the income approach, sales comparison approach, and cost approach. In your response, explain how you would apply the income approach to value this commercial property, taking into account the expected NOI and capitalization rate. Also, evaluate the advantages and disadvantages of this method compared to the other approaches.

Finally, provide your recommendation on whether the owner should sell the property based on your valuation findings.