If the property appreciates the numbers will be fine, but based on initial numbers, this does not appear to be a great investment property unless you are getting 5% appreciation per year which no one can predict. 

@Timothy Church I have recently been interested in Galveston vacation rentals - but feel that the supply could soon outweigh the demand, coupled with the impending legal implications of cities trying to curtail the rise in these.Basically, with 1,200+ units to choose from, a holiday goer will soon see rapid price drops to try and gain bookings from the owners as their occupancy levels decrease...What's your realistic short-term and long-term predictions in this space, and do you think there is still viable potential here?

This is not a prediction.

If I do X, then in Y years, Z will occur, and we're 85% sure of that outcome, based on the model"There are definitely times a model has been incorrect (it predicted something, but the real outcome was different)...but, even when a model is wrong, it teaches you something--and with that info, you can make even better models.Another drawback of building the models myself is that it took a lot of time--I probably could have saved time by adapting an existing model...I initially tried to adapt some existing models I found online, but they weren't easily adaptable to my specific circumstances/variables/goals/usage--which is why I ended up building my own models...

We are hesitant to give up a predictable income and steady cash flow.

Said another way, 50% of the units fail before the predicted useful life, and 50% operate longer than the useful life.To put the above in context, water heaters have a useful life of 12 to 14 years in Las Vegas.

On New Year’s Day 2008, having sold nearly everything we owned so as to be able to get back to square one, I sat on the couch aimlessly watching football working through the haziness of a new year with a 2-year rearview of a lot of bumps and bruises.

You can double check the population trends just by using google, and check the predicted future job growth by using a site like Bestplaces.net.

That is why I invest in these types of real estate assets as they are the most predictable & sustainable type of real estate. 

The first-pass solution is market capitalization...the constants that we can arrive at with good accuracy are market rents and operating expenses...so, we can predict cap rates in aggregate with 85%+ accuracy.