Any upgrades - especially large capital expenditures are justified by rent increases since you are improving their living situation. 

We are also aware that when it comes to personal expenditures and the resulting taxes, Muhammad Ali said it best: “You can run, but you can’t hide.”  

Ideally, you can rent side out for market rent, you also pay market rent and keep good rental and expenditure records.

At minimum, you should budget 30% of gross rents for vacancy, repairs, maintenance, and capital expenditures. 

This is why the spreadsheets that analyze real estate investments include lines for vacancy, all expenses, taxes, capital expenditures, etc. so that you can be very certain that the asset can pay the loan payment each month and you don't lose sleep.

GDP increased by 3.3% on an annualized basis in Q4 2023, handily surpassing expectations of 2%.Strong growth was accompanied by good news on the inflation front, with the Core Personal Expenditures Price Index meeting the Federal Reserve’s 2% target in Q4.

They include vacancy, maintenance, repairs, and capital expenditures (if you plan to outsource management in the future, they should also include management expense).  

Is the property hard to manage and will large capital expenditures be coming up in the next few years?

To ensure long-term success, I'm adopting a conservative approach with a 50% expenditure ratio.

I think that $250 per door is the Capital Expenditure amount you will put aside per unit per year.