I am sure a management company would know local laws regarding STR and have those stipulated in the lease for protection against the arbitrage folks.

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k1.

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings.

But I think every significant investor still has their hands in this, just putting more reserves aside than the casual does for various reasons(protect downside, get decent yield, opportunity cost, etc.) 

Are you taking measures to protect your deals?

If you are thinking of protection please read thishttps://www.biggerpockets.com/forums/48/topics/1170797-how-do-you-protect-your-properties

Our documents are always up to date with the most current legal requirements and are specialized disclosures are designed to protect the lenders interest no matter what type of loan you are making.

So believe you best option is to speak with an attorney on how to structure the lease to protect you the most.  

The response I received from the PM was that it's due to recent legislation where she's seen "professional" tenants take advantage of recent tenant protection laws that allow them to stay in the property without having to pay rent for the term of the lease. 

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