With fifteen years of vacation rental ownership and management I have advice and insight to share. I was fortunate to create my first vacation rental in 2005 when there was much freedom in listing, and tourist / vacation destinations were not regulating the industry. For roughly five years it was great and relatively easy. All one had to do was list a property and update the calendar everyday to stay on top of the list, which I did and my listing was always on page one for my area. Then came algorithms and OTA's (online travel agencies) which started to monkey with the system.
When Airbnb entered the market in 2008 it did not impact tried and true whole house vacation rentals like mine initially. But then there was a flip; Airbnb made it easy and "free" for everyone to rent their properties on the website. Then over time, the market became flooded and locals became aware of and annoyed by the "strangers" coming to their residential areas. That lead to regulations, restrictions, and big changes.
I mention all of this to offer perspective. The experience of starting off in that earlier era (that feels like a lifetime ago) and evolving with the changes in technology and public perception has provided a greater understanding of the industry.
The most important element of a successful vacation rental business is a viable property and a realistic income expectation. Now that travel has been severely restricted due to Covid-19, there is likely no one market where year round rentals are solidly booked as a short-term or vacation rental. Therefore, a property should be chosen wisely with the ability to afford it if were not rented four to six months of the year. Or have a way to generate income from that property in an off-season.
From personal experience in a vacation rental seasonal destination I can offer that having a break from the rentals in-between seasons is good for two reasons. One, it provides a time gap to tackle maintenance and repairs, and to take on larger projects such as interior painting and deep cleaning. Two, you get a break from guests. During peak rental season with guests coming and going I have to be on-call everyday just in case guests have questions and or issues.
The takeaway here is to consider a seasonal rental area where you can make the most of the peak rates and bookings. The off-season can be for longer term rentals, or for family and friends at a discounted rate or barter. Better yet is to purchase in a vacation area near your home so that you have a place to get away and have the ability to personally manage it.
When considering a property be realistic about the potential income. What are the number of nights could the property be rented? Base the answer on what is real and not hopeful so that you don't over-extend yourself financially. For example, after 15 years of having a cottage in a summer resort area I can tell you that the rental window is July and August. June, September, and October, and Christmas offer weekend or weekly rentals, but never fully booked during these months. January - May is basically dead. We tried long-term winter rentals, but found them to be annoying and not worth the lower rent.
I had a property in a summer and winter vacation area. This was good way to extend the rental season. However, April, May, most of June, and November were dead times. Those times were used for upgrades, repairs, and deep cleaning. The point is, be realistic on rental booking windows.
It is not fun to be stressed out about bookings, cancellations, mortgages, and all of the other expenses that go along with vacation rental ownership. It has to be financially viable to be worthwhile. And while yes, real estate does increase in value, there is a cost to maintain the value. Get the calculator, a pencil, and start working the numbers. Don't force it work, use facts, real data, and enjoy the results when you can afford the property.