I bought the wrong property in the right location. what do I do?

[Tamara Al Hashimi]

i bought a property which was great in many ways and terrible in many other ways.

its near the river, near the zoo, four schools, 2 shopping plazas, 20 minutes from the beach, 10 minutes from the train station, 40 minutes from a major university, 5 minutes from a major hospital, 5 minutes from the nearest commercial hub, 40 minutes from another major city and has great tourism industry, commercial hub and everything is a tick EXCEPT the fact that when I purchased the house, it was a sad little brick house in a sad little part of town, with sad qualities and below average appeal. Its structurally sound on a very good block of land but here's the biggest but- ITS NEUTRALLY GEARED. I lose 4000K a year on it but I get 4000K tax refund from it as well. I am able to tap into 180K equity but my income and cashflow is very limited and I am scared that I might be gambling and pushing my luck if I tap into the equity now.

the house was last valued at 450,000. The mortgage is 265000. 

What do I do with the equity, -- tap and GO ?? or just pay down the mortgage and then tap into the equity when the mortgage is around 150K?? 

I'm a single mum with two kids. I live with my parents and I earn 45000 from my day job. Any ideas are welcome.