How do people then generate a monthly rental income? 

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

The entity is a sub S corporation. 

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.

Current income is only 1100 a month.

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. 

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.

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.

Renting offers steady $4,000 monthly income, long-term property value growth, and potential tax benefits.

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.