This kiwi has learnt to fly high in Australian property market

The kiwi is synonymous with being flightless and burrowing down into a settled home and life.

Scott Townsend is a Kiwi but he clearly shares few traits with his native New Zealand’s iconic national symbol.

The builder by trade flew the coup at age 24 to Perth, and rather than digging in with one family home he has, along with his wife, amassed a property portfolio of 11 houses that have been subdivided, renovated, rebuilt and/or resold.

The portfolio is largely centred on Perth’s northern corridor and eastern suburbs but with a couple of additional properties in Brisbane and the Sunshine Coast.

A focus on affordable and mid-priced houses with subdivision or renovation upside has been the hallmark of Mr Townsend’s real estate strategy.

His early career as a builder in New Zealand has played a part in that approach but he said there was still much to learn along the way to compiling this impressive portfolio.

“I left school at 16 and went straight into residential building where I completed my building apprenticeship and worked as a qualified builder for several years before moving to Perth, 14 years ago.

“I continued as a builder in Perth but lost the passion for it, with trades here being specialised into one aspect of the home, whereas in New Zealand we were building high-end homes and seeing the result from start to finish, which I enjoyed.

“After investing in our first few properties, I left the building game and started getting into property development.”

Buying that first property was the catalyst for the journey that would unfold over the next two decades but it came about more through chance than design.

“The very first property was bought 50/50 with a friend in New Zealand when we were 20 years old.

“We didn’t really know what we were doing but it was his dad, who owned a handful of rentals who told us to do it.

“He did the auction bidding for us and we had no idea what it was worth or what we were wanting to spend; he just kept bidding until it was done.

“This thing was a dump but as builders we were able to tidy it up and put a tenant in place after purchasing it for $308,000, and eventually renting it out for $380 per week.

“It really didn’t grow much and after six years I sold my half to my mate, making a $76,000 capital profit.”

The 38-year-old Kingsley resident admitted that the early stages of his property acquisition process had very little strategic thinking behind it.

From that first purchase in his home town to subsequent purchases in Heathridge and on the Sunshine Coast, there was more good fortune than good planning.

“The first few purchases had no real strategy, which I would say is common for most investors who initially go it alone.

“The first property, we did as we were told in our home town.

“Heathridge was just an owner-occupier close to our friend circle.

“Sunshine Coast was through a property spruiker, off-the-plan, and not a great purchase but we learnt a lot from it.

“We got lucky with the Covid-period price explosion, as the property didn’t grow for six years and has had all of its growth in the past three or four years.”

It was from then on that Mr Townsend got serious, attending property networking events and getting to know professionals in the space.

“I educated myself on forums, magazines and found a mentor for development, but up until then we had really just been winging it.

“My strategy over the past several years has mainly been to identify and buy property we can force extra value out of, whether through renovation or development or any other way, with capital growth prospects foremost in our thoughts.”

A stunning example of that tactic was the transformation a run-down house in the coveted Mount Lawley area.

From being a borderline habitable house with squatters living in it, two townhouses emerged that later sold for $1.2 million and $1.3 million.

No perfect project

Although his background as a builder was useful, Mr Townsend said an industry background was not a prerequisite for property investors looking to emulate his own portfolio development approach.

“Having a building background is helpful but it really comes down to being across the numbers and understanding council policies, not that I would suggest going into a development blindfolded.

“Trial and error was a quick way to learn.

“I bought my first development site with the mindset of ‘if I break even and learn the process, that’s a win’.

“The reality is, even after doing several developments, there are still things that can get missed or overlooked.

“As long as there is enough target margin and contingencies, small extras shouldn’t have too much effect on the end result.”

Australia’s property hotspots

As an investor, and now a buyers agent with Perth Property Buyers, Mr Townsend has some insight into the property market.

Asked which cities had the best capital growth prospects for 2025 and beyond, three cities with very different characteristics stood out.

“It is likely Darwin finishes the year strong and could be one of the leaders for 2026.

“Perth will be right up there, with such low stock and not enough new supply to meet demand, we think boom conditions will continue and it certainly hasn’t peaked.

“Melbourne will also likely be a steady performer over the next few years.”

As for his own plans and prospects, he said that their property portfolio was sufficient to allow for a comfortable retirement now but that held little appeal.

“We enjoy what we do and I think retirement would get boring pretty quickly,” he said.

“Operating a boutique buyers agency and being selective of the clients we work with and not needing to hit certain KPIs is a nice feeling and I will likely keep it that way.

“We will continue to build our portfolio with more residential property over the coming years and then likely transition into some higher yielding commercial property in future.”

Not all plain sailing

As with any complex venture, problems do arise and troublesome people are often at the centre of the tumult.

He stressed that property needed to be viewed like any other business.

“You’re running a private accommodation company and there are costs to start the business, costs to run the business, incomes, outgoings and laws and regulations to abide by.

“The tenants are the clients, so there is a balance of keeping them happy and ensuring the income is sufficient to keep the business from going under.

“We like to keep rents in line with the market or slightly under and if repairs are needed, we action them quickly.”

And when things go awry despite this approach?

“We’ve only needed to go to court or make landlord claims three times.

“It can make new investors want to throw in the towel, but once it’s understood that it’s part of doing business, small niggles are overcome pretty quickly.

“For a while, I considered selling one of our properties after a couple of bad tenants.

“We didn’t and five years on, it almost doubled in value.”

His advice for others looking to get started on their property journey.

“Young or old, just start.

“Imperfect action beats perfect inaction - every time.”