[JohnnyCanuck]

While I don't have a vacation rental, we do own two rental properties and I think you're looking at this wrong.

Your costs are: mortgage interest, maintenance, insurance, renter acquisition costs, and property taxes. Your income is your rental income. However, this income is taxable so you need to account for that. Your true net income is therefore your income minus your costs and taxes on your net income. That part is easy and you are projecting a $6000 annual profit on a $50000 investment or 12% before taxes.

That's pretty good ROI. On top of that, you have the added utility of your rental income paying the principal of the mortgage building equity at no cost to yourself. That is additional profit to be factored into your calculation. The last area of profit/loss to consider is whether property will appreciate or depreciate.

In other words, your true profit is: net income + increased equity +/-appreciation/depreciation (minus initial acquisition (closing) costs and projected disposition costs) minus taxes. I know nothing about capital gains taxes in the US so it may be an additional factor.

In the scenario you are laying out, you are likely going to have a very healthy ROI. Once you calculate what that actually is, you can then determine whether you have another investment vehicle available that may provide a better return at the same risk level. If your numbers above are grounded, that's unlikely and it sounds like a good bet.