There are a lot of factors to this question as Philadelphia metro is very diverse and it would matter what type of renting you plan to do.I can speak to the areas I invest in (Olde Kensington/Fishtown/No Libs/Port Richmond) where there have been quite a number of large ‘luxury’ apartments built or being built in the last couple years.

You also have a higher loan limit, and can wrap "luxury" renovations into the loan (aka, putting in a Sauna or something).

My model would be to create a "ranch" of tiny/small cabins to STR on a property that would have a main "lodge" as well. 

The home is a few blocks from a University, in a sought out area(far from luxury, just great location).  

Unfortunately, you don't have that luxury.

Is granite in the kitchen and bath needed or an unnecessary luxury for the market.

Pools would be the typical #1 worst bang for the buck (with a few minor exceptions, those being in the luxury market).

So that brings up another question: Are DC investors and cash buyers going to be more interested in renovating to a high luxury level or would they be looking at the minimum to make the space livable.

Certain brokerages cater to high end / luxury properties in certain areas like downtown Chicago.

There is a lack of inventory for the properties that are luxury because of some uncertainity in the market and the richer don't want to spend right now.