BRRRR: how much higher can local rent market bare?

[Brendan L.]

BRRRR sounds great! But how can I tell if my local rent market can bare a certain level of rent increase? If I update a building, how will I know people will be willing to spend a higher amount of money on rent for "bells and whistles"?

Example: A town's median income is 40k with a population of 8500, and sees moderate to low levels of seasonal tourism. So the average person can afford 1k/mo in rent. Average rent for a 2 bedroom is between $650 and $700. How could I figure out if there would be demand for nicer, $800-$900 2 bedroom rentals? Are there rules of thumb to determine just how much to dump into renovation?