If local options aren't a fit, expand your search to other markets with strong rental demand.

Windows would be my next check-point (less than R1) and then wall insulation: I would not be surprised if they have no insulation inside, but you can do blow-in, which only requires a small hole.A home looses heat in two ways: heat conduction (which you can slow down with insulation) and drafts, which in old houses is usually the biggest culprit.

Best tips are take it slow and make sure you have significant reserves when you leave your w2 also don't buy a company car if you already have a car just to say it's for work.

First of all, I suggest you search the forums as arbitrage has been discussed ad nauseam.

Eric, First, Good idea on searching for a realtor specializing in STRs.

There are also many online calculators you can use if you do a search for them.

The listings @Joel Oh showed weren't in the first 50 listings for my search.

People needing a place while they search for a home to buy, etc... 

Here are a few suggestions on how you can maximize the wealth of information available: Check out the blogs and podcasts, or take advantage of the search feature (magnifying glass).

Find one in your  town certified since 2007 http://proadvisor.intuit.com/search/index-standalo...