澳洲買樓 | 小心中伏！Refinance加按陷阱

Frank 劉Sir

8 Aug 202009:28

Summary

TLDRIn this insightful video, Frank discusses the complexities of property investment and the common misconceptions surrounding refinance. He explains the basic workings of loans, including LVR, and uses a practical example to illustrate how property appreciation can lead to refinance for further investment. However, he warns against overestimating one's borrowing power and the potential cash flow pressures of multiple investments. Frank emphasizes the importance of considering individual financial situations and the need for a tailored investment strategy, inviting viewers to subscribe for more personalized advice.

Takeaways

🏡 Planning is crucial when buying a property, but many people are still unsure about how to plan effectively.
📧 Frank invites viewers to send their contact information and questions to his email for personalized advice.
🔢 The speaker emphasizes the importance of understanding the basic operation of loans, including the Loan to Value Ratio (LVR) and how banks assess property valuations and income to approve loans.
🏘️ Refinance is a common strategy for property investment, but it's often misunderstood. It involves 'topping up' a mortgage based on increased property value.
💰 The example given illustrates that while property value may increase, the amount one can refinance is limited by the bank's loan-to-value ratio, typically 80% to 90%.
📈 The script discusses the potential for property appreciation, suggesting that in Australia, property values may double every 7 to 10 years.
💡 It's highlighted that using refinance to invest in additional properties can leverage bank loans, but it's not without risks and requires careful consideration of one's borrowing power.
🚫 The speaker warns against the misconception that buying a house is a guaranteed path to wealth through property investment, as it depends heavily on individual financial circumstances.
📊 The importance of considering loan capacity and the potential strain on cash flow is stressed, especially when considering multiple investments.
📈 The script points out that property investment can be a long-term commitment, with the example of a 30-year mortgage that could leave one with no financial benefits in retirement.
🤔 The speaker encourages viewers to think deeply about their financial situation and the risks involved before deciding to refinance and invest in additional properties.
👍 Frank's role is to help clients find suitable investment strategies and properties tailored to their individual needs and financial situations.

Q & A

What is the main topic discussed by Frank in the video script?
-The main topic discussed by Frank is the concept of refinancing in the context of property investment, particularly focusing on the common misconceptions and the importance of understanding one's borrowing power.
What does Frank suggest people do if they are interested in learning more about property investment?
-Frank suggests that people should subscribe to his channel and turn on notifications to receive updates on videos that will explain how loans work in Australia and provide further insights into property investment.
What is the acronym 'LVR' mentioned by Frank, and what does it represent in the context of loans?
-LVR stands for 'Loan to Value Ratio'. It represents the percentage of the property's value that the bank is willing to lend to the borrower, typically up to 80% to 90% of the property's appraised value.
Why does Frank use the example of purchasing a first home and then refinancing to illustrate his points?
-Frank uses this example to demonstrate the potential for property appreciation and how refinancing can be used to access additional funds for further investment, while also highlighting the limitations and risks involved.
What is the typical property appreciation rate that Frank mentions in the context of Australia?
-Frank mentions that in Australia, it is common for property values to double approximately every 7 to 10 years.
How does Frank explain the limitations of refinancing based on property appreciation?
-Frank explains that even if a property appreciates in value, the amount that can be refinanced is limited to a percentage of the new appraised value, not the total appreciation amount.
What is the term 'borrowing power' as mentioned by Frank, and why is it important for potential investors?
-Borrowing power refers to the maximum amount that a person can borrow based on their income and financial situation. It is important for investors to understand their borrowing power to avoid overextending themselves financially.
According to Frank, why might it be challenging to secure loans for multiple properties?
-Frank explains that as the total loan amount increases, the borrower's ability to secure additional loans may be limited due to reaching their borrowing power limit, which is determined by their income and existing financial commitments.
What are the potential cash flow implications of owning multiple investment properties as discussed by Frank?
-Owning multiple investment properties can put significant pressure on cash flow, especially if the properties generate negative cash flow, meaning the borrower has to pay additional money each month to cover expenses, including loan repayments.
Why does Frank caution against the common advice of buying a house for investment purposes without considering individual circumstances?
-Frank cautions against this because each person's financial situation and investment strategy is different. He emphasizes the importance of finding a tailored investment plan that considers individual capacities and goals.
What advice does Frank give for those who are unsure about how to proceed with property investment?
-Frank advises such individuals to seek professional guidance to find a suitable investment strategy and property that aligns with their financial situation and investment goals.

Outlines

00:00

🏠 Real Estate Planning and Misconceptions

Frank, a real estate expert with a decade of experience, addresses the common confusion among buyers about how to plan for purchasing property. He offers to help those in need by providing his email for direct inquiries. He clarifies misconceptions about investing in real estate after buying the first property, such as refinancing to leverage property appreciation for further investments. Frank explains the basic workings of loans in Australia, including the Loan to Value Ratio (LVR) and how banks assess property valuations and income to approve loans. He uses a hypothetical example to illustrate the process of refinancing, where a property's increased value can be leveraged to secure additional funds for further investment, but cautions that this method may not be as straightforward as it seems due to limitations in borrowing power.

05:01

📈 The Risks of Relying on Property Appreciation for Investment

This paragraph delves into the financial challenges and risks associated with leveraging property appreciation for investment purposes. Frank discusses how the borrowing capacity of individuals is often overlooked, using an example of a couple's income and potential loan limits. He points out that even with high income, the ability to secure loans for multiple properties is limited, and the cash flow pressures from carrying multiple mortgages can be significant. Frank also highlights the potential negative cash flow from rental properties and the financial strain that could result from vacancies or interest rate hikes. He advises viewers to consider their financial situation carefully before embarking on a property investment strategy and offers to help find a suitable investment plan and property tailored to individual needs. The paragraph concludes with a reminder that what works for others may not be suitable for everyone, emphasizing the importance of personalized financial advice.

Mindmap

Keywords

💡Refinance

Refinance refers to the process of replacing an existing mortgage with a new one, usually with different terms. In the video, refinance is discussed as a strategy for leveraging the increased value of a property to secure additional funds for further investments. However, the video warns that this approach can be risky if one's borrowing capacity is not carefully assessed.

💡Borrowing Power

Borrowing power is the maximum amount of money a lender will allow a borrower to borrow, based on their income, debts, and other financial factors. The video emphasizes the importance of understanding one's borrowing power when planning property investments, cautioning that overestimating it can lead to financial strain, especially when trying to purchase multiple properties.

💡LVR (Loan-to-Value Ratio)

LVR stands for Loan-to-Value Ratio, which is the percentage of the property's value that the bank is willing to lend. In the video, it is explained that banks typically offer loans up to 80% or 90% of the property’s value, which is crucial when considering refinancing and further investments. The LVR determines how much equity can be accessed through refinancing.

💡Equity

Equity is the difference between the current market value of a property and the amount still owed on the mortgage. The video discusses how property owners might use the equity in their homes, gained from property value appreciation, to refinance and fund additional property investments. However, it warns of the risks associated with relying heavily on equity for further investments.

💡Investment Property

An investment property is real estate purchased with the intent of earning a return on the investment through rental income, the future resale of the property, or both. The video contrasts buying a first home for personal use with buying subsequent properties as investments. It highlights the potential financial challenges of sustaining multiple investment properties, especially when borrowing power is maxed out.

💡Cash Flow

Cash flow refers to the net amount of cash being transferred into and out of a business or investment. In the context of the video, cash flow is crucial in managing multiple properties. The video explains that even though rental properties generate income, they may also create a negative cash flow, requiring the owner to cover shortfalls from their own finances, which can become a burden.

💡Negative Gearing

Negative gearing occurs when the cost of owning an investment property (such as mortgage interest and maintenance expenses) exceeds the income it generates. The video touches on this concept when discussing the financial pressures of owning multiple properties, suggesting that while negative gearing can provide tax benefits, it also means that the property is costing more than it earns, creating financial strain.

💡Property Valuation

Property valuation is the process of determining the current worth of a property, often conducted by banks before approving a mortgage or refinance. The video mentions that a bank will assess the value of a property during the refinancing process, which will determine how much additional loan amount can be secured. Accurate valuation is key to understanding the potential for refinancing and investment.

💡Risk Management

Risk management involves identifying, assessing, and controlling threats to an organization's or individual's capital and earnings. The video emphasizes the importance of considering the risks associated with refinancing and property investment, such as interest rate increases, income stability, and the potential for negative cash flow, urging viewers to be cautious and plan carefully.

💡Financial Planning

Financial planning is the process of framing objectives, policies, procedures, programs, and budgets regarding the financial activities of a person or business. The video repeatedly stresses the need for careful financial planning when purchasing properties and considering refinancing options. It suggests that without a clear, personalized financial plan, investors may face significant financial challenges.

Highlights

Importance of planning when buying property and the common confusion among buyers on how to plan effectively.

Frank's decade-long experience in helping clients with property planning and providing real estate knowledge.

Misunderstandings about continuing investment after purchasing the first property and the concept of 'property swapping'.

Basic understanding of how loans work, including the role of property valuation and income assessment by banks.

Explanation of the Loan-to-Value Ratio (LVR) and its typical range offered by banks.

The concept of Refinance and why many people have a vague understanding of it.

A typical example of buying a first home and the potential for property appreciation leading to refinance.

How refinance can be used to generate funds for a second property investment.

The limitations of borrowing power and its impact on the ability to invest in additional properties.

The challenges of increasing income to support larger loans, especially during economic uncertainties.

The potential cash flow pressures from owning multiple investment properties and the risks involved.

The impact of rental income and negative cash flow on property investments.

Considerations for property investors when facing interest rate hikes and potential job loss.

The financial implications of selling a property after appreciation and the costs associated with it.

The challenges of upgrading to a more expensive property and the increased loan burden.

A cautionary note against blindly following the 'buy a house, refinance, and invest' strategy without considering personal financial capacity.

The importance of finding a personalized investment strategy and property that suits individual financial situations.