One of the tenants will be leaving one of the units, and I am planning to do some remodeling (thinking about removing the carpet except for the bedrooms, and replace it with laminated wood flooring, as well as some painting and cosmetic improvements)My question is I want rationalize this expenditure in terms of ROI, and how depreciation fits in this case?

The biggest mistake REI make, is to "rationalize" that current bad numbers are better than they appear they are by using numbers with %%% behind them, and/or worse, by assuming these current bad numbers will change based on future events you have no control over. 

I get the rationality somewhat but I typically only see that when the person doesn't value their time or recognize their limitations. 

Take the current market rate for a comparable unit 2k and then the current rent 1k Then multiply that by 6 or 12 So you get 6 or 12k Now you add concession for improvements if the tenant made any out of pocket Now 15k Add 1k for moving anxiety tax Now 16kAdd moving / storage 500-1kNow 17k I can rationalize and sell all of the above.

The people that start "faking" the numbers to rationalize paying a high price for a deal are going to get crushed in this next downturn. 

If, however, we take care to do our homework while taking a lot of deep, calming breathes and make rational decisions, the income will take care of itself and that will lead to realizing our vision.This a really long reply.

@Brieer Doggett,I would suggest looking at it rationally...1)  pay down debt--  pay less on on interest, decrease  overall debt2) Buy multi-family, and gain $2K/mo(what you said you pay in rent), or $24,000 year in income, gain experience, build equity .Which logically, do you think is better?

Keeping houses not bought as renters then using them to rent is a very common mistake, it almost never works out, yet people get emotionally attached to these houses and will go through mental convolutions to rationalize holding them unprofitably.

Your options may be limited- but you may have options.Also, please realize that there are people who are so imbued with partisan thinking they are incapable of rational discussions.I would also suggest staying away from the cable news, I hope you would have listened to that "marketplace" I recommended. 

Real estate  is definitely an investment strategy where emotions can take over rational thought very quickly.