Common deductible expenses include mortgage interest, property management fees, repairs, and even travel expenses related to property management.

Seasonal Slowdown (With a Twist)The holidays always lead to a slower rental market as potential tenants prioritize family, travel, and gift-giving over finding a new home.

Temporary work travelers etc.

I'm sure there will be others with their own (and possibly conflicting) opinions, but for question #1, I always advise my clients to focus on properties in areas that 1) they currently (or previous) live in/near, 2) they travel to frequently, or 3) they have family/friends in the area.For question #2, the answer is going to depend on what you do for #1.

I suppose I could combine the two ideas and live in a basement while renting out a 2 bedroom home to a traveling agency. 

A mid-term rental could be an great option during the 6-7 months you're away since it appeals to traveling professionals, remote workers, or individuals relocating and offers stable income without the constant turnover of short-term rentals.

While I use it primarily for noise concerns (it alerts me for sustained +80 decibels), it's also handy for cigarette smoke and tracking temperatures (in addition to our Ecobee thermostat)- sensors on all exterior doors and possibly windows (which you might have via smart locks for the doors)- exterior camsA recent guest for reasons only known to them set the thermostat to cool and 60F in the winter (where it's currently a balmy 11F). 

To me STR and hotel caters to different groups of travelers and so despite competition as long as the travel demand of Hawaii remains (as you pointed out is a robust assumption) I think both will continue to do well.  

He currently travels often for work and resides in TN. 

DO you want to do mid-term rental to traveling nurses?