When evaluating a a duplex, triplex, or quadraplex do you use the sales approach or the income approach?
You can use whatever you like to evaluate the deal. However, all of those properties are considered single family if you are using agency debt. The appraisal will use comparative sales analysis. Even if you like the income, you might not get the mortgage you need if you pay too much.
That said, I always treat any of my rental investment properties as a "commercial" and will evaluate it based on income. Cash flow is what I am after as an investor - not appraisal value or local comps. If I am flipping or rehabbing and refinancing, then I am always interested in the ARV based on comps. However, my decision to purchase is always rooted in cash flow. Even if I want to refinance, I will still base my decision on cash flow rather than market value; the only reason that ARV is important to me is to determine what a lender will give for financing.
If this is a question as to how the property will be evaluated: Sales Approach
If this is a question about personal preferences: Income Approach.