The house still needs central heating and air.

The unit dial concept is OK if you don't mind having to replace those that disappear as each tenant leaves.Be aware of the thermal o/load if the fans get too hot usually because something is blocking the air circulation.

As mentioned the legislation regulating STRs in San Diego is up in the air still.

I should clarify a bit, all the homes I've looked at so far have a furnace but no central air.  

They then use a dryer that blows hot air through the bag and it expands, bursts the original pipe and hardens into a new pipe. 

Don't wait for the furnace is blowing cool air when its 5 degrees phone call-- Have a process to make sure your HVAC filters get changed at least a couple of times a year (Don't trust the tenant-- it's your furnace).

In my opinion, spray foam insulation, UV reflective paint, fresh air systems, and solar panels should be standard in all new homes built in the last 2-3 years at an affordable price.

Current property taxes are roughly $1,000/yearCurrent owner pays $350/year for insurance.Current Tenant is paying for electric and sewer (House is on a well, so no water).We think the property will need $10,000 of work to be ready for a short term rental (Air cons, some drywall work, moving/updating the well, landscaping)Our ideal plan is to turn it into an outdoorsy airbnb with a nice backyard feature. 3+ bedrooms in the area go from 60-120/night with ~68% occupancy on airbnb.

Get the space air conditioned or heated so mold stops.

Instant added value, age in place, rental potential all very sellable, 3) you'd have to declare your intention with the city and probably have to give up your right to that spot, 4) yes and it will make a nice deduction as it will be used "exclusively" for your business so that will help with your taxes, air bnb and long term rental is totally allowed as long as you get the correct permits from the city for air bnb especially.