You keep records of upgrades because, as I understand it, expenses associated with the rental fall into one of three categories:
1. deductible from income directly
2. deductible from income over time (depreciation)
3. used to increase your basis in the property (offsetting the effect of depreciation).
So if you depreciate 100k out of your 250k house over a decade or so, but you do 100k worth of work on the house, when you sell it for 300k you only have 50k of capital gain instead of 150k.
Of course, I don't actually know what I'm talking about, so consult a tax professional.
Oh, and it isn't just utilities. If you rent 50% of your house, you can deduct 50% of:
yard maintenance
netflix
cable
electricity
water
sewer
trash
maid service/cleaning supplies
consumables (toilet paper, shower curtains, laundry detergent, anything you provide)
advertising for vacancy
And these are deductible 100% of the time, even if the unit is vacant, as long as you are trying to rent it, starting from the first day of tenancy until you give up trying to rent it out.
There's a list of allowed and not allowed items from the IRS, but if it isn't specifically disallowed I deduct it, because America!
I think there's also a cautionary tale about claiming a loss on a business year after year. At some point the IRS is going to come back at you for intentionally incurring a loss, so the goal is to charge enough in rent to keep it rented out, and earning enough to throw the IRS a twenty every other year.