In our experience in Denver and Colorado Springs with midterms, it take 12-18 months for the extra income from it being an MTR to pay for the furnishings.

How do people then generate a monthly rental income? 

Understanding and taking advantage of the variety of tax credits boosts the return on your property and allows you to be part of the move to conserve our nation’s historic treasures.When rehabilitating or investing in the rehabilitation of an eligible historic or non-historic building, you may be able to take advantage of one or both of the historic tax credits: 1) Historic Tax Incentives and 2) Historic Preservation Tax CreditsYou can receive a federal income tax credit equal to 20% of the costs associated with rehabilitating the building.

However, the nights they cancelled have already been completely filled by other guests, so I didn't really lose the opportunity to generate income. 

Current income is only 1100 a month.

Tax considerations involve a lot of personal, specific considerations so you are on the right track going for a CPA (make sure they are familiar with income properties and short term rentals).STR is a business and involves "active" income versus "passive" income associated with typical long term rentals.A few general things:1.

It involves some investment but might pay off in increased property value and rental income down the line.Also, assessing the market in spring (#3) could be beneficial if you're looking for a strategic time to sell.

I am aiming to overfund the initial purchase if I can to cover property, repairs, assumed mortgage cost for months of no income (assuming 6 months max), and any variance.

Short term capital gains is your ordinary income tax rate and long-term capital gains where you hold the property a year or longer is considered long-term capital gains is in as taxed a lower rate.  

I could get more ambitious with the renovation and make 4 total apartment units with 2 approx 800 sq ft. units on each floor to get a lot more rental income.