The long-vacant Coogee Hotel and Post Office site south of Fremantle has been restored to near-original condition by the State Heritage Office.

When publican Walter Powell built the hotel in 1898, the limestone and red brick building was surrounded by a small settlement and reached by a dirt track.

It became a stopover point for people heading south to the beaches of Rockingham, and its proximity to Perth made it a popular honeymoon hotel.

Coogee Hotel was built by Walter Powell in 1898. ( 720 ABC Perth: Emma Wynne )

In 1928, Mr Powell's brother-in-law Jock McKinnon built the small post office that sits to the north of the hotel.

The two buildings were landmarks on the coastal road, even after the pub closed and the site was taken over by the Anglican Church, used first as a holiday camp and then a children's home in the 1940s.

The old post office building is part of the Coogee Hotel site. ( 720 ABC Perth: Emma Wynne )

By the 1990s, the buildings had been bought by Main Roads with a view to eventually demolishing them for a since-abandoned road-widening project.

Lived in by a solo tenant, the historic building became severely rundown.

Heritage 'not just the province of governments'

Then the State Heritage Office stepped in with a plan to restore the buildings.

Under a program launched several years ago, the office began to "strategically invest in idle heritage buildings to prepare them for sale", Graeme Gammie, State Heritage executive director, said.

The idea is that rather than government paying to save and restore neglected heritage-listed buildings, a revolving fund targets buildings that are ripe for restoration and reuse, then sells them at a profit and reinvests that profit into other properties.

"Really it's a shift in thinking around the idea heritage is just the province of governments," Mr Gammie said.

"There are a lot of very important heritage properties that can become idle if they are owned by government but where there is no practical use for them.

"Buildings that are actively used are cared for, whereas those that aren't tend to deteriorate and fall apart.

"Keeping them used and active is the best form of conservation."

By doing the work itself, the State Heritage Office can ensure the conservation work is of a high quality, and for prospective buyers it removes many of the unknowns about buying a historic building.

The restored interior of the old Coogee Hotel. ( 720 ABC Perth: Emma Wynne )

"When it comes to sale, the prospective purchaser has all the information they need to make an informed decision about what the property is worth because they know what condition it is in and what they can do with it in the future," Mr Gammie said.

Twenty years ago, many home and business owners complained about heritage restrictions on their properties, but the past decade has seen a dramatic shift.

"You only have to look at the Perth CBD to see the transformation that has happened ... a lot of the really successful new bars and restaurants are in heritage buildings," Mr Gammie said.

Prospects for resale high

The Coogee Hotel and Post Office is one of the first sites to be restored using the revolving fund.

The other is the old Fremantle Prison warders' cottages, where work is nearing completion.

Both will be put on the market later this year.

"We are really excited about the prospects of the Coogee Hotel," Mr Gammie said.

"It was the honeymoon hotel when it was first built, and you can see that sort of use coming back quite happily, and food and beverage would fit right back in and I think it would be really popular."

The restored frontage of the Coogee Hotel faces towards the coast. ( 720 ABC Perth: Emma Wynne )

James Mason, the heritage manager who has been working on both sites, said passers-by were already taking a keen interest.

"We regularly get people walking past and asking for details," Mr Mason said.

"We have stripped it back to its raw state and put it back into its former shape.

"It looks lovely now."