Local Regulations & Market Conditions:In areas where vacation rentals are regulated or oversaturated, factors like legal compliance and market competition can have a bigger impact than ratings.

Also, good point about it potentially being more than the estimated 3 days once they get in there, I hope not.With all that being said, I am trying to be as unbiased and remove our “history” so to speak with these tenants regarding our decision for reimbursement, and making it purely about what is legally required and appropriate given the repair.

Consider zoning regulations, nearby development projects, and market trends to gauge its potential for value appreciation or rental income.

Each of these markets has its pros and cons, from rising property values to varying regulations on short-term rentals.As for financing, beyond traditional mortgages, you could explore DSCR loans (especially useful for rental properties), private lending, and even seller financing.

However, they told me that I have to rezone my property as commercial and that I have to comply with a bunch of different regulations like updated landscaping, parking, etc.

It is precisely because of mentoring programs that teach strategies and techniques to people who do not have any grasp of the three afore mentioned fundamentals that we have such a mess with “wholesaling” and “subject to” that governmental authorities are figuring ways to heavily regulate or outright ban these activities in the residential real estate field. 

In reading about RSO in LA, it seems to be defined around regulations for LTRs, not specifically MTRs.

There's a very good chance the issue(s) you face have already been discussed and answered.Ask questions in the appropriate forum.

I can understand your concerns regarding lack of regulation. 

However the poster is admittedly a new landlord and is seeking advice on how to handle this matter appropriately.