First step - recognize work that needs to be done, and do it!

However the situation may have been created in the first place, most states recognize that a property owner has a right to be able to enter and exit his property – called the right of ingress and egress.

There are a ton of ways to reduce your costs of maintaining this security barrier like series LLC (assuming your state recognizes them), utilizing lands trusts, limited partnerships, equity stripping, stacking entities, etc.Asset protection is all about setting up barriers or roadblocks in front of the person coming after you.

They must be capital gains that would be recognized and from a sale or exchange with an unrelated party.2.

I agree with most comments above, it is very likely you will have the property in your possession again in a few years, the other issue is, lets say you apply $200/mo of the rent to principal, because the tenant is "renting to own" Fannie Mae, Freddie Mac and FHA do not recognize the additional rent paid to principal for down payment, because they lend on the purchase price, and no matter how you word it, they will not accept $10 or $20K as Down payment for the loan if it was paid to you over time. also if you need to remove them from the property it is possible a judge may see the principal payment as equitable interest in the property, there are many hag ups in this strategy. 

I'm just an old guy that likes to take naps.Glad this is at least recognized as a partnership.

Comparatively, a duplex anywhere near Sydney is around $1,000,000 and rents for around $4,000 per month — no possible way to cash flow so you’d be gambling on appreciation.

@Amber Gonion The concept you are referring to is "tacking" consecutive owners' possession together to meet the adverse possession time requirements and as far as I know there is some recognized variation of it everywhere.

crossing the calendar year to recognize the gain in - 2018 = as good as it's going to get for you.  

I am in full agreement that a positive cash flow is a very important goal, due to the fact it insulates you from gambling on appreciation, equity, and rent increases.