I have an apartment in the inner west of Sydney (investment property), and am weighing up the option of selling it to buy a house (with land content-front and back yard). Preferably something that has potential for capital improvement via renovation or development. My motivation: -Capital growth of houses in the area has outstripped that of apartments. (I’ve calculated the apartment’s annual compound capital growth since 2003 and it’s 9.0% pa. Capital growth of an average house in the area has been 13.5%. To put this in perspective, a $300K apartment in 2003 is now worth $650K whereas, a $600K house is now worth over $1.65M -A lot of units are getting built in the area - though many are probably of lower quality and higher strata costs (I'm only paying $520 pq). Question: I want to build a property portfolio. Should I sell the apartment and buy a house worth $1.3M or should I keep the apartment and buy another investment worth $650K?