When I worked with a property management company, we had someone buy a unit (single family) that had a STR and marketed it as a STR.

Their insurance has asked me to return the month's payment for the remaining days of their rental (Unfortunately, I did not have a cancellation agreement).I am unsure how to handle this situation, especially since I couldn't fill the majority of the rental dates and had to offer discounts for the days I did manage to book.

We're an appreciation market, not as much of a cash flow market here, unless you're putting a large down payment or actively managing STR's.Buying out-of-state can get you more cash flow, but the tradeoff is less appreciation (usually), and cash flow can be eaten up by maintenance and expenses.

I follow the letter of the law( no matter how much I may not like it) that's part of my risk management and my reputation.

I have only 3 doors that I manage so not a big time player so wanted to start with some cheaper software and I heard on the podcasts that RentRedi was included in my pro membership so I signed up.  

It’s definitely worth exploring if you’re looking for a robust management tool.

If the negative cash flow is manageable and the appreciation potential is strong, it could be a smart move.On the other hand, investing out of state allows you to enter more affordable markets with strong, steady returns, helping you to build a diverse portfolio over time.

I used Hostify and you can work it into the management system to figure and charge all of that for you.  

If there’s a significant difference, it might justify the cost of adding more beds.For example, we manage a 4BD property where one bedroom is currently locked off, so it only sleeps 6 (1 king, 2 queen).

As for the rest of it, you can find a lot of useful tips on past forum posts along with podcasts and youtube material on the topic (BP and other RE sources).We've self managed STRs for a few years.