In addition to the added rental income that a renovation would bring, the risk of vacancy is lower with a higher quality unit. Furthermore, the more high-end a unit is, the more likely an owner is to have a lot of interest in the unit and subsequently the more likely he or she gets a good tenant. Once the tenant is in the unit, the quality of that unit removes one less "objection" or reason for them to leave the unit. Many people often forget that there are costs associated with turnover (vacancy, broker fees, cleaning/prepping of unit for new tenant, repairs or updates requested by the new tenants).
However, the owner does have to consider their long-term strategy with the unit. a $24,000 kitchen/bath renovation that only brings an additional $200/month is going to take 10 years to recuperate. If the owner plans on selling over the next several years, will there be a sufficient return on the sale to warrant the renovation?
I find that every owner in this city has a different strategy when it comes to these sorts of things, personally, in properties I plan on holding for a long time, I find it worth it to use quality materials and updates to increase both rent and the satisfaction of my tenants.