Toledo's regulations are actually much worse, with a number of investors from Toledo PIN suing the city over it.  

Always review your lease agreement and consult local laws to ensure compliance with all regulations.

I suggest you let the settlement agent know about the letter and submit a claim to your title insurer using the procedure listed in your policy. 

My beef with the people who teach this are(1) they imply this is somehow related to real estate investing; it is not(2) they imply you can be successful with only the knowledge they teach; this is not true, you need managerial and business skills and knowledge to a degree way beyond the scope of the “training” they provide.(3) they imply you can successfully do this on a part time basis; it’s actually a full time business demanding all of your attention(4) they imply competition is limited; competition is actually fierce, except for the deals on which there is no profit.Additionally, this industry is state regulated, by the state in which the property is located.

Then in keeping with USPS regulations (that the exasperated mail lady gave us because of the complaints) we added large numbers on the mail boxes that corresponded to the respective tenants units.

That's going to help make or break your market decision-- barrier to entry, purpose, and regulations.

Cons might include increased inspections and regulations, potential for property damage, and the possibility of dealing with tenants who have more complex needs.

With all the new regulations and liability, I'm not seeing the same kind of reckless appraising that drove the lead up to the bust.Jay mentioned having cash reserves to weather problems.  

It casts a dark shadow on an already struggling industry and opens the doors for more reform and regulation. 

How local governments regulate STRs will determine a lot about the area.