Hi ft,

My thoughts on your questions below:

Has anyone done this and if so are there any issues such as getting title or arranging finance to build an investment property?
Given the attractive returns currently offered in the Pilbara, landing a block to build on, is your first challenge.  If you have found an opportunity to do this without the lottery, I would look at it very closely.  $250k for  a 530m2 block in Hedland is quite good. 
We recently were very very lucky in Karratha securing a block for first home owners / builders.  Our block was $205k @ 515m2.

Has anyone had recent building experience in this area of West Australia as I live in QLD and will have to run this from a long way away! could be a problem for on site inspections. And what would be the best type of home to put there?
..and what are the approximate building cost rates up there?
We are currently building an executive style 4×2 for $600k from a top-end builder. Once completed, approx rent shall be $2000-2400/week (14% yield), or sell for $1 – 1.1mil.  Similar yields apply in Hedland.  Lots of good builders up there.  Be wary of modular homes – final costs can be similar given amount of earthworks/transport required.    We wanted to build a really nice place given it was a nice corner block.  Prob could have done it for $550k, but would have yielded $100-200/week less return.
Our CoCr (cash on cash return) for this project is looking to be between 70 and 80%.

Like all investments, do as much research as you can on proposals for development / future projects in area etc.  I am not that familiar with Hedland, but I do know that the ore companies are ramping up production and expansions in the area.  Karratha is more secure with it's LNG, salt, fertiliser, ore-loading and bio-fuel sectors.  Not to mention being the major port for barges to Barrow Island (chevon). 

Irrespective, considering the vast differences in stamp duty from WA to eastern states, investing over here is pretty bullet proof.
There are tonnes of +ve cashflow properties in Perth at present too.

Thanks for your insights Catalyst.  Some of your questions answered below to paint a better picture of our situation;

No, the $450k is approx the clear profit if we sell after 12months of living in our PPOR.   Total cost of build, including land cost is around 800k.  We have 10% down on this, and our loan is I&P.  Current market value (once built) will be circa $1.1-1.2M.

Our combined wage is about $195k (almost split equal).  The house is currently only in my partner's name, but if we started leasing it out after we lived in it for 12months, it would be in both our names.

This is the unknown.  I wouldn't count on much CG.   The focus of keeping it would be to enjoy the high +ve cash flow.   This is where we are getting a bit lost….should we sell straight up, or lease out?

Cheers
Walt

On this topic, would someone be good enough to clarrify amount of CGT payable on a PPOR?  I am still trying to understand the extents of the term "CGT Exemption".  Does the full exemption mean only 50% of the bought to sold price is taxed?  Or does the full exemption mean 100% CGT free?

Reason why I ask;  my partner and I are currently building our first home, which we intend to live in for 12months.   At that point, if we sell, will we need to pay any CGT on what gain is made on the sale?   Would appreciate some input here as this will determine whether we sell straight up, or lease out.