So let's say the purchase price is indeed $252k.20% down, 30 year fixed rate loan at 7.5%Monthly payment would be $1,410Property Taxes would be at least $2000/yr given that it is not homesteaded - so at least 165/monthInsurance will be around 80 to 100/month - we'll say 80/monthSo we are now at 1655/month before vacancy and capital expenses.You quote renting to a Section 8 tenant - I'd add $2400 in cap ex per year then. 

Management fees, lease up costs, turnover costs vacancy rates, repairs, licenses,  non paying tenants etc. are all examples of these. 

After $265/mon from capex, repairs, & vacancy, i will lose $450/yr in cashflow.I feel like this is a great opportunity, but it still won't cashflow.

That's way less risky for me in the case of vacancy.

I get the owner's statement every month (from Buildium) that shows rents, vacancies, property management fees, maintenance expenses, etc. 

We may habe high property taxes but our rents are high with increases quite common, and insanely low vacancy rates.

You are correct hotel underwriting typically has vacancy built in for cosmetic updates but in this case it appears your improvements far exceed keeping the hotel rooms updated. 

This could significantly increase competition.Technology RequirementKeeping vacancy costs low and high guest satisfaction high will depend upon the proper use of technology.

With the job growth at Tesla, other tech moving from CA combined with limited building opportunities I expect the rents to grow and vacancy to stay under 3%. 

Airbnb is also very region specific, so picking a place with low vacancy (high demand) is very important.