we were looking in craigie and beldon WA for a while.
before we bought what we bought, we were SERIOUSLY looking at a VERY run down, vandalised 4x1 DB&T on 690sqm in craigie for $165k.
over the road had a very similar home, sloping the opoosite way, for $265k.
now, if you'd have had the time, this house had good bones and would have cost about $50k in an IKEA kitchen, flloor coverings, window treatments, paint, tiles and some roll out turf in the yard with some swap-meet plants.
$50k for reno = $100k increase in value = $50k profit for a solid 3 months work.
not a bad return in anyone's language - no doubt you could have wiggled them down to make the $165k asking price include stamps - just to round things off.
anyway, the house got snapped up. i'm sure someone made a killing out of it, but there was no "doubling of price" or "massive rental returns" - just some profit or equity to be had by buying a bad house in a good street, lower in price than comparitive homes in the area.