Would it be better to look further away from the main tourist areas to find cheaper rents while still being a reasonable distance away from Universal City, Hollywood, the beaches etc or stay within a 3 or so mile radius and be more competitive?

Augustine is a top tourist destination, near the beach, and options for managers.

Thanks for adding the info about TripAdvisor and Booking.com.I personally live in a popular tourist location, and have considered only renting my own house out for the max allowed days before taxes are required (14).This is perfect for when we go on vacation.But you are right, it is a lot of work to clean and then over your house.

However, there are about 7 million tourists to Galveston every year.

That part of NH has very little in the way of business, or even tourist attractions.

The mountains in east Tennessee smoke every vacation rental market in the country with 80+% occupancy year round. 13 million tourists per year only 26,000 residents. 

Dora is about 45 mins from Disney and other attractions, so its in the ballpark for your 'standard Florida' tourist who thinks outside the box on where to stay. 

I live in a large Amish Community in Southern Indiana with several different things to offer but just not sure if I should only promote a place for people to stay or widen the choices to include tours and actual time they (Tourists) could spend at Amish Farmsteads which would include learning all aspects of the Amish Lifestyle.

Things I consider when evaluating a market.External factors that provide jobs to pay for houses- Colleges, Big business, Population density, Vacation/Tourist attractionsDemographics that are generally balanced are places that I'm interested in.

That paired with the fact that we get 13 million tourist per year makes this area the best option for vacation rentals in the country (that's my opinion) Although I must point out, if you're not willing to self manage the returns will be similar or less than a LTR.