We are toying with the idea of building some small summer rental cottages to rent out to tourists.

There is a major tourist city nearby but it is 35 mins from this town.

I could rent a one-bed house to a traveling nurse for $1,500 a month or I could rent it out nightly to tourists at $100 a night and make $3,000.

7+ bedroom homes do well in any tourist heavy area (we are in Tampa/Clearwater/St Pete Market) as they can accommodate large groups and simple land demand principles apply as there are many large groups wanting to rent accommodations and there is not enough supply.

Go to Prospect Park, Brooklyn, which is local and not affect by tourist, and you'll see that while it's the 2nd largest Park in NYC, there is barely any room to do activities from all the people who live in the surrounding area.From this report NYC Population Growth you can see that NYC's population growth is expect to increase another 800k.

Doesn't look like a wining strategy to me.

She said many of the homes in her area sit empty, waiting for tourists to rent them out, instead of being made available to those in need of housing locally."

Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbookYou might consider Niche or Specialized Housing like student housing, tourists or vacation rentals.

I'm considering a Direct mail campaign, but my area is a heavy tourist area, with about 40-50% being second homes and seasonal rentals, so absentee owner lists are pretty difficult to weed through, obviously I will need to focus on NOD's and Tax default, and death notice/estate/probate lists, anyone have experience in a heavy second home market?

Conde Nast Traveler recently announced their 'Top 10 Trips everyone in the US should add to their bucket list' and it features some impressive vacation regions and activities:- Hot Air Ballooning, New Mexico- Bluegrass Trail, Virginia- Visiting Point Dume Malibu, California- Horseback Riding, Wyoming- Airboat tour Everglades, Florida- Winter expedition cruise, Alaska- Spiral Jetty, Utah- Camping In Acadia National Park, Maine/Rhode Island/Massachusetts - Trekking the Bayou, Louisiana - Wine country, Willamette Valley & Napa Valley Oregon/California