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IrinaHollander
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Hi Bert
You are right, self-managed super is not going to work for all.
I have seen superannuations funds started with as little as $50,000, and they went from strength from strength. $50,000 would be the minimum starting balance, I would not recommend setting up a self-managed super fund with less than that...unless:
1. one is a business owner in need of business premises to operate their business from. In that case, the starting balance can be zero; or
2. one has access to either physical cash or equity in their existing property outside of super and they are looking to invest in property within their super. In that case, no minimum super balance is necessary either.

In terms of restrictions in property investments in super, they are not overly burdensome, though it is important to get it right :) You can buy a commercial property, residential property, land & home package, off the plan property as long as residential property is not being purchased form a related party or not being occupied at any time by a related party.

There are many ways to skin a cat, as they say, and the limited recourse borrowing arrangement provisions (borrowing in super) cater for that.

From tax point of view, if one is purely intending to invest in a residential property, they should seek out a neutrally or positively geared property, as there is almost no point in negatively gear inside of super.

I guess the main attraction of investing in property in super is being able to sell it tax-free once you have retired (based on the legislation as it stands now). As the future tax benefit is that great, it is suddenly not that important if the administration costs of managing your own super (accounting and audit fees) are, say, $500 greater a year than the current master/industry fund’s fees where not much is happening in terms of growth.

A lot has changed in the SMSF administration industry too with the introduction of partial automation of transactions in the accounting software, so it is worthwhile to get a few quotes to see actually how much you would be paying should you set up your SMSF.

Please let me know if you have any further questions, I am happy to help.