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Builders are required by law to give specific minimum warranties to ensure that one will not face any major problems during the first few years of living in your new property investment. The advantages of this is that it is simple to understand and easy to calculate. It incorporates the risk premium rate in the cost of capital and facilitates scientific evaluation of proposals. It helps to increase the cash flow and the value of the apartment building. Underestimation may damage the investment and lead to loss. The real estate market may not be doing well now, but as time goes on it will improve.