Not something I typically get involved with so was curious as to what rent/room is in the area.

My investment property is in upstate NY and I live out of state and am managing myself (via my brother that lives in town), not a house hack, long term rental on both sides.

If they continue to smoke in the apartment, you have grounds to file for eviction due to them breaking the terms of the lease.

We have been contemplating our strategy to start our business by having my sister buy her first home locally here in Connecticut, a duplex as her primary residence and live in one unit with our mother, while renting out the other unit to a resident, and be able to also rent out her single-family house as a short term/midterm rental to traveling nursers/working professionals on furnish finder.

You might also be a good candidate for a small boutique hotel, an operator looking to retire will often entertain seller financing on fair terms and you could likely qualify for a SBA loan to help with your vision. 

Most of our housing stock is 60 to 120 years old and requires a lot of capex, especially the bottom of the barrel properties are typically fools gold, because capex will exceed cash flow over a few years.

Is there a standard letter that I need to send tenants a month before the end of their lease to remind them to move out by the end of the term?

Typically any kind of conventional (fannie/freddie), FHA, VA, USDA type loan for a primary residence will require you to move into it within something like 3 months.

It might be easier to treat it as a full scenario with Purchase price, Down payment, Term, Prorgam, occupany, number of units/rents per door, Taxes/Insurance (Any flood, HOA) etc. 

People will always have issue with shared amenities in a short term rental house.