Hey @Bryan Cork ,
My mentor always went for a payback period of 3 years (36 months) for improvements to be worth it. If payback was bigger than 40 month he never did it.
Put another way, he'd invest $1,000 if it boosted rent $30/month. That's strictly a cashflow mentality since he seldom assumed appreciation.
Colorado is experiencing major appreciation, so you could lower your payback standards since your profits would come from appreciation.
Finishing the basement: Assuming $15,000 to get an extra $250/month, that's a payback of 60 months or 5 years. It's personal preference, but I wouldn't do it.
Adding A/C: Assuming $4,000 to get an extra $50/month, that's a payback of 80 months, almost 7 years. Again, personal preference, but an even worse idea (cashflow-wise) than finishing the basement.
I think the best way to evaluate an additional investment is "Return On Investment".
Your bed/bath example yields you a 20% Return on Investment ($250 x 12 / $15k).
Your A/C example yields you a 15% Return on Investment (($50 x 12 / $4k).
Both of these would be decreased by vacancy rates, but they are both pretty good.
So the question is "do you have other investment opportunities that would yield you a higher return on your money?"
If you do then take them. If you don't then invest in the bed/bath.