Sell in Surfers Paradise or Pay it down?

Hi guys,

Looking for guidance on current situation

Here it is:

1. I have one property in Surfers Paradise. Purchased at $196K and loan of $159k with $100K sitting in offset so servcing IO loan of $59K at 5.15% IR (positively geared). Rent of $230 p/w (now valued at $186K)

2. I have a property in Maroubra (Sydney). Purchased at $625K and loan $496K but I’ve taken out $100K in equity so loan is sitting at $600K with 4.5% IR (and property valued at ~$800k) (negatively geared). Rent of $460/pw

3. About a week away from buying a property in Melbourne for ~$380K with $100K down so loan will be $280K at ~4.5% IR with $420 p/w rental income

In light of potentially rising interest rates in next few months I have two questions

1. Should I put as much into surfers property as possible now so I effectively have one fully paid off property and then use the income to put towards paying down Melbourne?

OR

2. Should I sell Surfers Paradise and put all funds towards paying down other two properties that are much better? This will lock in a loss but frees up funds to put against much stronger properties in offset.

Aside: Surfers was purchased for $196K and is now valued at $186K. I used Nathan Birch to make this purchase and have followed up for guidance around what I should do as after paying $10k for his service he did not deliver on what was agreed (i.e. purchase property below market value)

Not surprisingly Nathan and his colleagues have stopped responding however they are very communicative when he wants to sell you something. – BUYER BEWARE of this spruiker. He will take you for a ride. If you want my full Nathan Birch review and experience PM me (quite awful really)

Thanks for all your guidance and help!

Rob