That conversion will not trigger any tax.Unfortunately we can no longer eliminate all of the tax simply by converting to a new primary and living there. 

If you figure out a way to eliminate all those spam calls please let me know!

So it can be a bit tricky to do it this way, but ultimately, requiring that hold deposit will let you eliminate the risk of a tire kicker no showing on you when it comes to pay and you've already told everyone the house is rented.

A few additional thoughts, the platforms consistently push us to reduce or eliminate cleaning fees especially on short stays because of how much they are proportionally.

I would be eliminating bad debt and high interest credit cards that I had to use to do some repairs. 

That way you eliminate the need for a 2nd lien Heloc and only have (1) mortgage.

And for that end phase, yes, that's where debt elimination is awesome.

Alternatively, you may need to factor in a larger repair budget to address the vacancy issue, effectively eliminating the risk. 

Definitely could be a factor but I don't think Redfin and Zillow eliminate agency any time in the near future.

It doesn't eliminate the risk but at least anticipates the scenario.