There are so many variables based on location and price of homes. The more I research, the more I think it would just be best to be the renter and not the owner.
For example, last week we stayed 3 nights in a VRBO in Palm Springs, CA. I would guess the house was probably worth around $500k(1,700 sqft and huge pool). The nightly rate was around $250/night. From November to April it's $350/night. The owner lives in Palm Springs and owns 4 of these in the area.
Lets make some assumptions:
2,500/month P&I (30yr mortgage)
$900 Taxes
$200 Insurance
$200 Month Pool Maintenance
$250/month VRBO cost
$500/month cleaning
$200/month utilities
$500/month up-keep
Time??
So about $5,250/month cost. $63k year
Now lets say that it's rented 365 days a year at $300 Avg. About $110,000 potential
80% occupancy $87,600-$24,600 profit
60% occupancy $65,700-$2,700 profit
50% occupancy $54,700-$8,300 loss
My guess is that from November to April they have at least 90+% occupancy. My guess is that from May to October it's around 30%. When we were driving around Palm Springs (118 degrees) it was a ghost town but it sounds like once October hits, it becomes crazy busy.
We also stayed 4 days in a house in San Diego via airbnb. It was sort of a duplex and the place we stayed in was probably 400 sqft max. On the plus side it was in a great area, very clean, and cheap. My guess with the prices in San Diego is that this house(whole duplex) probably cost around $500k.
Lets make some assumptions:
2,500/month P&I (30yr mortgage)
$900 Taxes
$200 Insurance
$200 Air bnb costs
$500/month cleaning
$100/month utilities
$500/month up-keep
Time??
So about $4,900/month cost. $59k/year
Now lets say that it's rented 365 days a year at $225 avg (both units combined). About $82,125 potential.
90% occupancy $73,900-$14,900 profit
Looking at their calendar and knowing San Diego, there is no way that occupancy is less than 90%.
Both owners of these properties live in this area and manage these properties themselves and both own multiple properties so I assume they make good money on them. If you take this same scenario and add in a property manager at 10%, you may be lucky to break even. Then you have to consider things like appreciation of the property. So many different factors to consider and I could be 100% off on costs.