Statements like:"Juice isn't worth the squeeze""Nightmare""Not worth it"From the best I can tell the building is in a C part of town. 

I'd encourage you to explore simply selling the house and letting your parents take the tax free exemption. 

And to clarify: is the old town district the area Randal Mill, Center, and North Streets?

Funny how these small town tenants think you will never see them again or something when they do things like this. 

There aren't many of these around per each town.

I know Poconos is a big area, but I'm just looking for a few suggestions of towns that work better than others for short term rentals. - Any other help/recommendations would be greatly appreciated!

I own a 5-plex in a small town in East Central Nebraska, and have actually had people who say they were appraisers from my bank (they weren't) go into the building and try to talk to tenants about the kind of info you were describing as well as looking to get my number. 

I've been exploring the discussions addressing IRC 199A and the IRC 162 requirement that must be met in order to obtain the new tax benefit under 199A.

Also, some towns have restrictions on the number of unrelated people that can live in one house together.

., significantly above comps) for very high end finishes, particularly in a town that is known for historic preservation.