As someone who has purchased, developed, and managed vacation rentals for nearly 10 years, I do have some experience with these types of properties.
The easy answer, and also the most honest, is "it depends."
Investing in the right vacation rental is probably the epitome of location, location, location. A home right next door to a an existing vacation rental may do better or worse on the market simply due to amenities or lot and home orientation.
It takes an some experience to locate the right property, but when you do, they can be great for cash flow.
Regarding location...I've had better ROI in Mission Beach for vacation rentals over any other location, but that doesn't mean that is a hard and fast rule.
Give me a call if you would like to discuss any of this further, or take a walk around some of the short term rental properties I like or have been involved with.
Prudential California Realty