The main road gets too much traffic but luckily we are on a quiet street.   

It is very busy down here, lots of traffic and new subdivisions.   

A few days later she lets me know there are a lot of people coming in and out of unit #2 at all hours and neighbor noticed a lot of traffic.

If it's a retail operation, park outside and get a look at the foot traffic. 

You may as well run the airbnb yourself.You should also investigate whether airbnb is legal in your area and whether th eadditional traffic will result in neighbour complaints.

They mentioned carpet “issues”, which I’m assuming is the high traffic areas. 

I've also met with a developer who said he looks to "double" on every deal  - meaning he is spending 200k for land/permits/materials/labor and targets a 400K sales priceIn my area, 4 units+ is the trigger point for all sorts of additional complicated planning reviews and requirements, curbs/gutters, traffic studies, environmental reviews, etc...       

Some condo properties rent weekly to which in my opinion is a lot of hassle, maintenance due to high traffic, and attract some not so good renters occasionally; and with high management fees too.

Remove the current drive way and have two off street parking spots next to the street with a nice walk up up to the front door, easier to leave the house without having to back up into traffic.

Although in our area, traffic can be so bad up and down I-95 that people regularly commute an hour and a half each day to their job.