[YokoZar]

If you improve a mansion to be a fancier mansion, you don't increase the supply of housing.

If you improve a small lot to be a duplex or an apartment complex, you increase the supply of housing.

The latter wouldn't raise the net price of housing, but would still be a worthwhile investment. It depends on what local policy is, namely if building new housing is illegal or not.

[soared]

Making one house fancier definitely increases rents on neighboring properties. If I live in a rundown house in a nice neighborhood and fix it up, everyone else's house increases in value. Same goes for making 1 house really nice in a bad area.