?

Hi lawler

Do whichever is most profitable – it sounds like you are already aware that this is knocking it over and developing.  Be sure that you can actually develop the site before you make too many decisions… chat to council and a local draftsperson as a starting point.

Hi AT

As has already been mentioned, your balance is certainly sufficient for a SMSF to acquire a property.

Let's pretend you opened a SMSF and bought one property with it, which paid itself off by the time you reached retirement age.  Could you live off the rental roll of this one property?  Well it depends on the rental yield, but generally no.  So your SMSF would need to aspire to acquire more income-producing assets (eg property, dividend-producing shares, term deposit accounts, other or a combination of some of these).  But you do need to start somewhere, and one property is one such way to start.

It should be noted that there are very few lenders remaining that will lend to a SMSF with less than $150k in the kitty.  In this regard, if SMSF is the route you wish to take, you might consider getting cracking with it before the lending restrictions tighten.

I second the vote for Doug

Do you mean to say that you have onsold a property via an option?  If so, you are not exempt from stamp duty in all states.  This is not my arena of expertise, but I believe you'd be ok in QLD but not in VIC or NSW.

Hi Tomo

Steer clear. 

If you are going to find it tricky to buy the thing due to being able to borrow 50% at best, then anyone you hope to sell the property to in future would face the same difficulties.  In other words, it'll be hard to sell if you need to offload it.  This will affect its capital growth because there won't be lots of buyers beating down your door wanting to buy it from you. 

Better to look at a normal dwelling with more floorspace, and against which you can borrow at a higher LVR.  Ideally something that would appeal not only to investors but also owner occupiers, in case you ever needed to sell it.

It's much easier to find properties that fit your wishes if you look at mixing a lot of strategies together, rather than expecting one strategy to do the job all by itself. 

Sure no worries.

Remember the council is a different entity from the water company, so the fact there is just one water meter doesn't mean it wouldn't be council's opinion that you have two dwellings.  A dwelling is something that has a bathroom (including toilet and shower/bath), a kitchen (with a sink and oven) and bedroom/living space.

If the dwelling is not approved with council, they could demand you apply for an illegal works permit (a couple of thousand to pay an engineer to draw up plans for the bungalow plus a $1000 permit application fee, plus $ for any amendments they demand such as increasing the ceiling height to the acceptable height.  Or they could demand you tear it down at your own expense (and no doubt charge you for a demolition permit for the pleasure). 

It depends.  I've never looked into how an offset account would be treated…

You have debts that will take you a couple of years to recover from… why not hunker down and clear those debts first?