Harris and Wood real estate agent Matt Wood said the two properties, on two titles, were purchased for between $1.4 to $1.6million.

"It sold to a Warrnambool and district investor," Mr Wood said. "They thought it provided some security given the long-term tenancies and how well they had been maintained."

He said the property at 221 Lava Street, was 252 square metres and had an annual return of $32,500. The premises are currently leased by long-term tenant of 32 years Warrnambool Bolt & Tool Supplies, and the Warrnambool Laundrette, which will soon be listed for sale with Harris & Wood.

The next door premises at 223 Lava Street, which includes two upstairs residences, is 355 square metres and has an annual return of more than $74,000. Its tenants include Mens Hair Room and Ladies Hair Lounge and Courtney Jade Make Up and Brow Boutique.

Both of the upstairs residences were leased by long-term tenants, he said.

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"The original owner was having a redirection of their assets and given the currency of the marketplace he thought it was a good time to maximize his returns," Mr Wood said.

He said the properties had been in the same family for a long period of time.

"They've obviously spent a lot of money and continued to improve it over that time too," Mr Wood said. "They refurbished upstairs and renovated all the residences upstairs and did a fabulous job.

"There's a three-bedroom cottage and a one-bedroom unit. They created whole new ceiling lines that let a lot of natural light through. It's actually quite a surprise when you get up there. They're really well done," Mr Wood said.

The original owner is also selling two separate properties at the rear which will be auctioned online by Harris and Wood on Thursday.

Mr Wood said the two sandstone cottages, at 2 and 4 McLean Lane, behind Monaghan's Pharmacy, offered a "unique opportunity to secure a CBD property with no heritage overlay and a business zoning that was full of potential".

Each cottage has a price guide of $300,000 - $320,000.

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