--- title: "Client Case: $830K Purchase, $850/Week Rent, Granny Flat Under Construction" description: "Real client walkthrough: 650sqm block, $830K purchase, $850/week rent from main house alone. Granny flat construction starting — projected total rent $1,150/week." author: Joey Don date: 2025-05-08 category: Renovation & Development url: https://premiumrea.com.au/blog/client-case-study-granny-flat-850-week-rent tags: ["granny flat", "case study", "client walkthrough", "rental yield", "construction", "Melbourne"] --- # Client Case: $830K Purchase, $850/Week Rent, Granny Flat Under Construction *By Joey Don, Co-Founder & CEO at PremiumRea — 2025-05-08* > Real client walkthrough: 650sqm block, $830K purchase, $850/week rent from main house alone. Granny flat construction starting — projected total rent $1,150/week. This article covers client case: $830k purchase, $850/week rent, granny flat under construction. The analysis draws on real transaction data from PremiumRea's portfolio of over 100 client purchases across Melbourne's southeast corridor, combined with ABS demographic data, CoreLogic pricing analytics, and REIV quarterly reports. As someone who has spent a decade buying property in Melbourne — first for myself, then for over 100 clients, I can tell you that the conventional wisdom on this topic is about 60% right and 40% dangerously wrong. The 40% is where most investors lose money. Let me walk through what the data actually shows. ## The numbers that matter I track these metrics obsessively. In Melbourne’s southeast — the corridor running from Frankston through Cranbourne to Narre Warren — the fundamentals are structurally different from the rest of the city. Median house prices in our core suburbs sit between $620,000 and $780,000. Rental vacancy is below 1.5%, compared to the Melbourne metro average of approximately 2.5%. Owner-occupier ratios exceed 90% in most pockets. And monthly price appreciation has been running at approximately $5,000 per month for the past 18 months. These aren’t cherry-picked numbers. They’re the consistent pattern across every suburb where we operate. The correlation between supply constraint (zero new land release) and price growth is almost perfect. Suburbs with new supply are flat. Suburbs without it are rising. For investors, the practical implication is straightforward: every month you wait costs approximately $5,000 in missed growth. Over a 12-month decision delay, that’s $60,000 — roughly the same as the stamp duty you’re trying to avoid by waiting. ## What most people get wrong Here’s where I get blunt. The majority of buyers in this market are making decisions based on headlines rather than suburb-level data. Melbourne’s aggregate median has declined, and that single number has scared off thousands of potential investors who would have been extremely well-served by buying in the right pocket. The aggregate median includes apartments (falling), western greenfield corridors (flat), and established land-scarce suburbs (rising). Averaging these together produces a number that describes no actual property in any actual suburb. It’s like averaging the temperature of an oven and a freezer and concluding the kitchen is comfortable. I’ve been saying this for three years. Every client who listened is sitting on 15-25% gains. Every person who waited is now paying $40,000-$60,000 more for the same house. The second mistake is timing. Waiting for interest rate cuts to “confirm” a recovery means buying after the recovery has already started. Historically, Melbourne house prices rally within 6-12 months of every RBA rate-cutting cycle. The 2019-2020 cuts produced a 15% surge. By the time the media declares the recovery, the early movers have already captured the bulk of the gains. > “The best deals I’ve ever done were when everyone around me said I was crazy. Buying in Cranbourne in early 2023 when the media was calling Melbourne a disaster zone. That Cranbourne house is up $230K.” — Joey Don ## The practical framework Let me give you something actionable. For investors with $200,000-$250,000 in savings or accessible equity, Melbourne’s southeast offers three distinct strategies depending on your financial situation and goals: **Strategy 1: Negative gearing (high-income earners, $150K+ salary)** Buy a $700,000 house on 600+ square metres of land. Rent it whole-house for $500-$550/week (3.5-4% yield). Accept the $5,000-$10,000 annual cash shortfall and claim it against your income at your marginal tax rate. Focus is purely on land-value appreciation. **Strategy 2: Positive cash flow (renovation/multi-tenancy)** Same $700,000 house. Spend $65,000-$80,000 on internal conversion to dual or tri-living configuration. Rent at $900-$1,200/week (6-8% yield). Cash-flow positive from month one, even at current rates. **Strategy 3: Granny flat addition** Buy the house. Build a 30-square-metre granny flat in the backyard for $110,000 + GST. Combined rent: $800-$900/week ($500-$550 main house + $340-$370 granny flat). Immediate bank revaluation uplift of approximately $150,000. Each strategy has different cash requirements, different tax implications, and different holding-period characteristics. The right choice depends on your income, your borrowing capacity, and whether you’re optimising for cash flow or capital growth. Our typical client engagement starts with a financial assessment that identifies which of these three strategies matches their situation. From there, suburb selection, property selection, renovation scope, and rental management all flow from that initial strategic decision. > “Property investment isn’t complicated. It’s just specific. The strategy that works for a $200K-income couple is wrong for a $90K single buyer. Get the strategy right first, then find the property.” — Joey Don ## Where this goes from here I’ll be direct about my view. Melbourne’s southeast corridor is in the early stages of a price recovery that will accelerate when interest rates begin to fall. The supply constraint is permanent — there is no new land coming. The demand drivers (population growth, infrastructure investment, rental shortage) are structural and strengthening. The window for buying at current prices is narrowing at approximately $5,000 per month. Properties that were $600,000 twelve months ago are $660,000 today. Properties at $660,000 today will be $720,000 twelve months from now if the current trajectory holds. I’m not asking you to trust me. I’m asking you to look at the numbers. Every data point I’ve referenced in this article is publicly available. CoreLogic, REIV, SQM Research, ABS — the sources are open. Do your own analysis. If you reach a different conclusion, I genuinely want to hear it. If you’re ready to act, the next step is understanding your borrowing capacity and matching it to a strategy. If you’re not ready, at minimum track the suburb-level data monthly so you can see the trajectory with your own eyes. Waiting for certainty is expensive. Acting on probability is how wealth is built. ## References 1. [CoreLogic Home Value Index, Melbourne, 2023. Suburb-level price data.](https://www.corelogic.com.au/our-data/home-value-index) 2. [SQM Research, 'Residential Vacancy Rates — Melbourne', 2023.](https://sqmresearch.com.au/graph_vacancy.php) 3. [REIV Quarterly Median Prices, Melbourne Suburbs, 2023.](https://reiv.com.au/market-insights/median-prices) 4. [Australian Bureau of Statistics, 'Regional Population Growth', Cat. No. 3218.0, 2022-23.](https://www.abs.gov.au/) 5. [Reserve Bank of Australia, 'Cash Rate Target', 2023.](https://www.rba.gov.au/statistics/cash-rate/) 6. [PropTrack, 'Market Outlook — Melbourne Forecast', 2023.](https://www.proptrack.com.au/) 7. [PremiumRea transaction data and client portfolio analysis, 2022-2023.](#) 8. [Australian Taxation Office, relevant tax guidance referenced in this article.](https://www.ato.gov.au/) 9. [Consumer Affairs Victoria, property and tenancy regulations, 2023.](https://www.consumer.vic.gov.au/) --- Source: https://premiumrea.com.au/blog/client-case-study-granny-flat-850-week-rent Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent