How much can I afford to spend on a rental upgrade?

[Nancy Roth]

The Section 8 tenant who has lived in my rental for two years has given notice, and in addition to the usual maintenance to make the single-family rowhouse ready for next tenant I'd like to make a couple of important upgrades. 

How could I analyze the amount I can afford to spend on an upgrade based on projected gross rent receipts? Or net rent receipts? 

I know how to determine the appropriate purchase price when acquiring a property, but I've already had the property for three years. I own it free and clear, having paid about $33K (including settlement fees) for it three years ago. I invested about $6K in it after acquiring it.

Here are the upgrades I'd like to do:

Install new HVAC (with or without AC? I don't know)

Pull up carpet and install vinyl plank resilient flooring

Replace crummy, warping laminate kitchen counter

Uncover a skylight that was drywalled over in a bedroom

The townhouse is in Baltimore City. I had been getting $1207 in rent from Section 8 for it as a two-bedroom plus den home. If I uncover the skylight and the den becomes a bedroom again, and I upgrade to central air, I believe I could get more--but it's unpredictable, so would like to analyze from the previous rental amount. I plan to hold this rental for the long term. 

Is there a method to help me figure this out? Would appreciate guidance.

Nancy Roth