Also factor in what a vacancy will cost you. 

It appears that the income is the most determining factor. 

So really right in line with historical stock market returns.The beauty of real estate is the it is 1) much easier to buy advantageously (get a good deal) than with stocks--at least for the average person, 2) you can also buy, even without leverage, properties that out perform the stock market, and 3) you can safely leverage 70% to 95% without much difficulty, making your money work much harder for you. 

Im sure there are points and fees to be charged for the loan upfront which you would want to factor in.

Hey Will - we are based in South Florid (Boca Raton, Delray Beach area) and we are seeing some success with converting long term rentals to Airbnb short term rentals due to probably the same factors as you - close proximity to the beach, A/B neighborhoods, etc.We were hesitant to use one of these high cost Airbnb management companies as well, as they really dig into your cash flow.

Also factor in the location/condition of the property.

Private lenders, Hard Money Lenders, a "subject to", an Lease Option, or a Private Lender don't usually care how you do the ownership. but most of those require some cash in the deal or "sweat equity" as a safety factor for them. 

They are in a market where you have a very limited amount sellers you have to be able to compute multiple factors per transaction and you have to spend money on marketing. 

It isn’t near profitable when factoring in the mortgage and taxes and such.

If you guys are looking to rent it out then you would need to run a pro forma factoring in all of the operational expenses associated with the property against the rental income ( amortization, economic vacancy factor, insurance, property tax, reserves for capital expenditures and repairs, etc.) and see if it is actually a profitable cash flowing investment.