How to tell if a market is good for Vacation Rentals?

[Russell Gronsky]

Hello BP gals and guys!

So I've been looking at vacation rentals as a way to increase cash flow. I am currently looking into the city and HOA rules about vacation rentals but while doing research, a question popped up: How do I know if there is enough demand for vacation rentals in the area?

I currently rent the SFR via management company, to a long term tenant who is on a fixed income and can't help but wonder if the grass is greener in the vacation rental space. But, before I spend thousands to furnish an 1800 sq ft, 3/2 house and work out a cleaning service, booking (I'm out of state so will need someone to check guests in and out), handyman, etc, I want to know if my investment is worth the return. So how can I tell if there is enough demand for vacation rentals in the area to justify the costs?