I want to share the most simple and straightforward configuration that suited my needs for developing locally.

First of all, make a quick backup of your current default file in /etc/apache2/sites-available/ like this:

cd /etc/apache2/sites-available/
sudo mv default .default.bckp

Now create a new file called default in the sites-available directory with the following content

<VirtualHost *:80>
    ServerName test1.local      #the local hostname
    DocumentRoot /var/www/test1 #the corresponding document root
<VirtualHost *:80>
    ServerName test2.local
    DocumentRoot /var/www/test2

Now add the local hostnames to your /etc/hosts file and you're good to go!       localhost test1.local test2.local

PS: I'm sure this conf is won't fit in a production ready environment, but for a local setup it's just amazingly simple and effortless.