Effect of upcoming single family homes on existing rental

[Juhi Banerjee]

I liked a duplex around 30 years old with 2 and 3 bedrooms with one side renting for $1100 and other one for $1200 per month. I was about to make an offer on the property but the agent informed me that there is an big builder constructing multiple single family homes in the area just behind the duplex. The area has a high appreciation potential with good livability index. Also there is a widening of road going on to anticipate increase in traffic in front of the duplex. 

I wanted to check what effect the existing availability of homes will have on current multi-family rentals like the duplex in question. Will the rent get squeezed because lot more homes are available to own and further rent down the road.  The current duplex has only couple of hundred cashflow after taking out all the expenses including mortgage but the existing area has very good appreciation potential. Even the decrease in 10% rent can have adverse effect on cashflow.

I am also open to do a cosmetic repair where I can improve some of the stuff to compete with newer homes in the area (say granite countertops and stainless steel newer appliances). What is the risk here due to increase in competition and can a 30 year duplex compete with newer homes made by big builder?

Another question I wanted to check was the duplex is on a huge stretch of land almost totaling 1 acre. Can I sell some portion of the land to the same builder after closing the deal.