[MRM]

Buying a single unit or home for a rental, particularly a vacation rental, is not a good investment. To answer your actual question, you need to return at least 20% to justify the risk of renting. There is almost no way to break even, let alone turn any profit renting a vacation house or condo. There is no way you can reach a reasonable rate of return renting a single vacation unit, almost no way you can do it by renting out a single family home, and very little way you can do it renting a single condo or townhouse.

As mentioned above, you can make a reasonable rate of return on a single family home or single condo unit if you buy it distressed, fix it up, and rent it out with little sunk costs. Otherwise, you need many units to make a decent income. Renting is a risky and expensive business. It is time consuming and if you aren't there every day to deal with every issue, you're paying someone to do it.

The best way to get a decent return on rental property is to buy into a distressed condo or townhouse development that is fully rented and has on site professional property management. Many condo or townhouse developments were built to sell the individual units, but couldn't when the market tanked so they became rental developments. Find one of these developments and leverage your money to buy a dozen units at a price where the rent minus the mortgage, interest, fees, taxes and expenses gives you a positive cash flow plus 20%. If your return is less than that, keep looking.