I Turned a $800K Corner Block Into Three Rentals Paying $1,200 a Week. Full Walkthrough.

Three rents. One mortgage. One title.

That's the elevator pitch for what we built on a 719-square-metre corner block in Melbourne's southeast. The property cost $800,000 to buy. We spent roughly $85,000 on modifications. Combined rent across three independent living spaces: $1,200 per week.

Gross yield on total investment: 7.1%.

I filmed a walkthrough of all three units last month because people keep asking whether these numbers are real. They are. Let me take you through the property, the conversion, the costs, and the rental performance — unit by unit.

Why corner blocks change everything

Corner blocks are the most undervalued asset class in suburban Melbourne. And I say that after reviewing thousands of properties.

A mid-block property on a 700-square-metre lot has one street frontage. Access is limited to the front. Side access — if it exists — runs through a narrow gap between your house and the neighbour's fence. Granny flat construction requires materials to come down that narrow corridor. Council setback requirements apply on three sides.

A corner block on the same 700-square-metre lot has two street frontages. The second frontage gives you independent access to the rear or side of the property without going through the main dwelling. That independent access is what makes multi-unit configurations possible.

At 719 square metres, this property had 22 metres of primary street frontage and 15 metres of secondary street frontage 1. The secondary frontage opened directly to what was originally the backyard — which became the access point for the second and third living spaces.

Corner blocks trade at a 5-8% premium over equivalent mid-block lots. But the development yield premium is 30-50%. The maths is overwhelmingly in favour of paying more for the corner 2.

Unit 1: The main house ($500/week)

The existing dwelling is a 1995-built brick veneer. Originally four bedrooms, two bathrooms, double garage. We reconfigured it slightly — closed off the internal door between the rear two bedrooms and the main living area, and created a separate entrance via the existing side passage.

The result is a self-contained 3-bedroom, 1-bathroom dwelling with its own entrance, its own kitchen (existing), and its own living area. The fourth bedroom was absorbed into Unit 2's configuration.

Renovation cost for Unit 1: $8,000. New paint throughout, SPC flooring in the bedrooms ($62/sqm installed), new tapware, kitchen splashback. Nothing structural. Nothing requiring council approval.

Rent: $500/week. Tenanted to a young family — two adults, one child. Rent-to-income ratio: 27%. Clean TICA check. Twelve-month fixed lease 3.

Unit 2: The converted rear section ($380/week)

This is where the corner block advantage kicks in.

The rear of the main house — originally the fourth bedroom, a rumpus room, and the laundry — was converted into an independent 2-bedroom dwelling with its own entrance from the secondary street frontage.

Key modifications:

• Installed a kitchenette ($6,500 including cabinetry, benchtop, sink, cooktop, and rangehood)
• Converted the existing laundry into a bathroom with shower, toilet, and vanity ($9,000)
• Installed a separate electricity meter ($1,800)
• Installed a separate external door accessing the secondary street ($2,200 including frame modification)
• Privacy fencing between Unit 2's outdoor area and Unit 1's backyard ($3,500)

Total modification cost for Unit 2: approximately $23,000.

The living space is roughly 55 square metres — compact but functional. Two bedrooms (10sqm and 9sqm), a combined kitchen/living area (16sqm), bathroom, and a small outdoor courtyard accessed from the secondary street.

Rent: $380/week. Tenanted to a single professional working in the area. The separate entrance from the secondary street means this tenant has no interaction with Unit 1's residents — they use a completely different access point 4.

Important note on compliance: this conversion was done as an internal alteration — no new external walls were built, no additional floor area was created. The existing building envelope was retained and the internal layout was reconfigured. This approach avoids triggering a planning permit requirement in most Victorian councils. However, building regulations around fire separation, egress, and amenity must still be met. We engaged a registered building practitioner to certify compliance 5.

Unit 3: The detached granny flat ($320/week)

The backyard — accessed exclusively from the secondary street frontage — had room for a standard 50-square-metre granny flat. Two bedrooms, one bathroom, open kitchen/living.

This is a ground-up build: concrete slab, timber frame, Colorbond roof. Same specification we use across all our granny flat projects. Build cost: $105,000 (slightly below our standard $110,000 because the smaller footprint — 50sqm vs our standard 60sqm — reduced materials).

Council approved the secondary dwelling under standard residential provisions. Application took 6 weeks. Construction took 12 weeks 6.

Rent: $320/week. Tenanted to a couple in their 50s — semi-retired, downsizing from a larger house. They love the independent access from the side street and the small private garden.

Total granny flat cost including site preparation, sewer connection, and landscaping: $112,000.

The full financial breakdown

Let me lay it all out.

Acquisition:

• Purchase price: $800,000
• Stamp duty: $43,070
• Legal/conveyancing: $1,800
• Building inspection: $550
• Subtotal: $845,420

Modifications:

• Unit 1 cosmetic renovation: $8,000
• Unit 2 conversion: $23,000
• Unit 3 granny flat build: $112,000
• Contingency/miscellaneous: $5,000
• Subtotal: $148,000

Total investment: $993,420

Rental income:

• Unit 1: $500/week
• Unit 2: $380/week
• Unit 3: $320/week
• Total: $1,200/week = $62,400/year

Gross yield: 6.3% (on total investment) Gross yield: 7.8% (on purchase price only)

Estimated expenses:

• Property management (7% of rent): $4,368
• Insurance: $3,200
• Maintenance (6% of rent): $3,744
• Council rates: $2,100
• Water rates: $1,800
• Total expenses: $15,212

Net rental income: $47,188 Net yield: 4.8% (on total investment)

At a mortgage rate of 3.5% on $800,000 (assuming 100% finance for simplicity), annual interest is $28,000. Net rental income after expenses is $47,188. Cash flow positive by $19,188 per year — or $369 per week 7.

This property generates $369 per week in positive cash flow after ALL expenses, including property management and maintenance. That's passive income. Real, bankable, repeatable passive income.

Can you replicate this?

Yes — if you find the right block.

The critical features:

1. Corner position with two street frontages. This is non-negotiable. The second frontage provides independent access for the additional units.
2. Minimum 650 square metres. Below 650, you struggle to fit three units with adequate private outdoor space for each.
3. Existing dwelling with a rear section that can be physically separated. The conversion of Unit 2 only works if the house has rooms at the rear that can be isolated without demolishing walls.
4. General Residential Zone. GRZ allows secondary dwellings (granny flat) and provides the most flexible development pathway [8].
5. No restrictive covenants. Some older subdivisions have covenants prohibiting additional dwellings. Check the title.

Corner blocks meeting these criteria represent maybe 5-8% of listings in our target suburbs. They're not common. But they come up regularly enough that patient investors can find them — particularly if they have access to off-market opportunities.

Our team identified this property through our agent network before it was publicly listed. The vendor accepted our offer within 48 hours. By the time it would have hit realestate.com.au, it was already under contract 9.

That's the advantage of relationships in this market. The best blocks don't wait for you. You need to be there first.

And yes — I'd recommend consulting professionals before attempting any conversion. Get a building surveyor involved. Get council pre-approval if you can. The numbers only work if the compliance is right. Do it properly or don't do it at all.