No matter what you do I think you really want to consider renting it out for at least a year to convert the ($130k minus $13k in closing costs, minus $80 cost basis = ) $37k in profit from regular income down to long term capital gains.

I would go 2 bedrooms, it will have more value as a regular rental, airbnb and future appreciation.  

They will leave the place filthy and walk away from their $750 deposit because it's the cheaper, easier option.Landlords need to set rules, inspect regularly, and enforce the rules.

What is also very common is to charge a more aggressive security deposit or do a regular security deposit plus a monthly Security deposit alternative on top of rent to ensure you are properly Collateralized.

Folks tell you to not bet on it, I would tell those same folks to not bet on **** properties having regularly paying tenants and/or trusting government systems(sec 8). 

Can someone give me some insight on Room Rentals in the Philadelphia area and what are the current stipulations and does this follow the same format for regular rentals as well as evictions? 

Any answers to these questions and any suggestions about how you would set up your business in this scenario to maximize the offset to your regular individual income from another source would be appreciated.

You can conduct regular inspections and handle tenant concerns promptly.

But with showing minimal taxable income over the last 2 years, it's now hard to qualify for any type of traditional bank refinancing.

Screening uncompromisingly and regular inspections can go a long way to mitigating potential risks.