In the field of structural engineering it is of vital importance that the condition of an ageing structure is monitored to detect damages that could possibly lead to failure of the structure. Over the past few years various methods for monitoring the condition of structures have been proposed. With respect to civil and mechanical structures several methods make use of modal parameters such as, natural frequency, damping ratio and mode shapes. In the present work four methods for modal parameter estimation and two methods for have been evaluated for their application to multi degree of freedom structures. The methods evaluated for modal parameter estimation are: Wavelet transform, Hilbert-Huang transform, parametric system identification and peak picking. Through various numerical simulations the effectiveness of these methods is studied. It is found that the simple peak-picking method performs the best and is able to identify modal parameters most accurately in all the simulation cases that were considered in this study. The identified modal parameters are then used for locating the damage. Herein the flexibility and the rotational flexibility approaches are evaluated for damage detection. The approach based on the rotational flexibility is found to be more effective.