Should we sell our property and go back to renting to pay off debt, or hold onto it?

Q.

We are currently in a two bedroom unit valued at $525k - we paid $472k four years ago. We would like to move to a bigger property as we have two kids and planning a third. We also have some debt we would like to clear. Should we sell our unit, clear the debts and rent a bigger house - basically start over again I suppose, or should we stay in the unit and struggle for a bit longer so we can eventually buy a bigger place?

Renting is always cheaper than owning, so, unless you foresee strong capital gain in the unit a better option may be to quit it now and start again. If your debts are caused by poor money management you should start to do some strict budgeting otherwise you will find that any surplus funds from the sale will be slowly but surely frittered away.