Now if your thinking location jumps out as a big factor to all this, you hit the nail on the head, location location LOCATION. 

A lot of the success stories and content we’ve seen in the past came from a very different rate environment, so I’m definitely factoring that into my approach.For now, I’m planning to focus on the Jackson County/MO area, specifically around Lee’s Summit where I have some local support from family.

Just a case in point, the tiny apartment I live in (800 square feet) the mortgage payment is about 4000 per month, and the typical rent for such a place would probably be somewhere between 1500 to 2000 per month.

What factors should I consider when setting rent per room?

When under contract at 300k with the expectation that codes would be the determining factor on what can be done on with the property, as it relates to new construction.

Do the calculations factor in default rates?

Compounding on one another sure that will have a big impact on the market but there are a lot of factors at play.

You should have a good idea of every expense you have in your primary home, then add the STR specific:  (These are rough estimate numbers, depending on various factors)STR insurance - a special insurance that covers both the property and your liability, could be $2~4k in areas without natural disasters, could be more than $10k in some other areas.cleaning fee - approx. $50 per bedroom, so a 4-bedroom house will cost you about $150~200consumables - bathroom supplies, kitchen supplies, beverage supplies: $20~30 per week, depending on how much you providewear and tear - towels, linen, kitchen utensils, some furniture: $1000~2000 per yearRepairs/replacement for things that guests break or steal:  $1000~2000 per yearAlso, if your personal use is less than 14 days a year, the entire property's expense is deductible against STR income, but if you use more than 14 days, then you will have to calculate the proportion of how many days it's rented out vs how many days you or your family uses. 

When under contract at 300k with the expectation that codes would be the determining factor on what can be done on with the property, as it relates to new construction.

An audit could be triggered by a number of factors that don't line up when run through the IRS's system, and create an exception.