Can somebody tell me what exactly is a refinance?

[Jasraj Singh]

I've seen a lot of videos and I am still not sure What exactly is refinancing and How does refinancing benefits rental properties? 

Can somebody tell me please?

[Douglas Mcqueen]

@Jasraj Singh  Refinancing in simple terms is just getting a new loan.  Typically as it relates to rental properties people refinance for one of two reasons.

Loan Restructure.  If your initial loan was not under the best terms I.E. higher than current interest rate, payment to high.  If rates have dropped significantly since you first borrowed or your specific circumstances have changed you can refinance into a better loan or longer/shorter term in order to better capitalize or more easily afford the loan.

Cash Out.  If you have made improvements to the property to increase its value, the property has appreciated significantly, or you have built up a good bit of equity through pay down you can refinance the loan and pull out the equity you have built in cash.  The cash you pull out is tax free since it is debt and not income, and this allows you to re-invest in more property or simply put cash in your pocket.  You are able to pull out your initial investment and leverage your cash to work in more than one place (your initial investment continues to make income while you re-invest the cash somewhere else.)

In either case you need to weigh the cost of financing against the reward in some cases refinancing does not benefit you but if done correctly it is a powerful tool to increase your investment capital and reach.