My mom has a vacation rental in Florida. It cost $245,000 to buy, and the income is approximately $30,000 per year. Out of that 30k comes: 20% commison to the property manager, $150 cleaning every time some one leaves, taxes, HOA, utilities, cable, supplies (towels, bedding, lightbulbs, etc), repairs, insurance, and a whole lot of hassle (hurricane zone). Lots of the expenses can be deducted so she ends up pocketing around $5-10k per year. The property 2 years later is now worth about $300,000.
Just like everything else, you have to buy low/get a good deal for it to work. She likes it because she can escape the winters. It’s northern Florida beach front, so the peak rental time is actually during the summer and she uses it herself during the winter so she doesn’t have to freeze her butt off in her home state. It’s consistently rented for weekly rentals from April-August, and some random rentals here and there during off season, there was one repeat renter who booked for a whole month but he had to be canceled due to hurricane damage.
If I was to get a rental, watching my mom’s experience, I would NOT do short term vacation. I would do a normal yearly rental in a normal neighborhood if I wanted to actually make money with less hassle.