We were happily living in one central Oahu home in summer 2000 when spouse found our "dream house" a few miles north, being given away at a huge discount by desperate sellers. (Even after a decade's decline, the real estate market sucked particularly badly that year.) We were both on active duty at the time and overwhelmed with the idea of selling one to buy the other, so we bought the other and rented out the first. Military bases & tenants are pretty thick on the ground around here so we weren't losing money. Navy Federal didn't know when we were leaving active duty so they were happy to let us mortgage both places to the hilt.
Spouse's parents caught wind of our situation and declared that they'd like to live in our rental and watch their only granddaughter grow up. That phase lasted for nearly six long years. Losing money on a rental is painful enough. Losing money on a rental because your PILs are squatting in it is even more painful, especially when the prospect of long-term care is coming over the horizon. Luckily our daughter grew up and my PILs never acculterated to Hawaii so we got the property back in late 2006, more than four years after I'd ER'd.
We promptly rented to another military tenant and spent the next couple years fixing up the place (PILs refused to "let" us spend money on it during their tenure). We also did a series of refinancings over the years, so cash flow finally turned around last year and now things look pretty decent-- a cash-on-cash return of 3-4%. This has been an unexpected bonus in the ER budget, although it comes after years of red ink.
The rental has a small yard and an age-in-place-friendly floorplan, so it's easier living than our current dream home. However we can make our dream home just as age-in-place friendly and hire out the yardwork. There's the remote possibility that our daughter will someday want our grandkids going to high school in this dream home's neighborhood, so we're probably going to hold on to both places for the next couple decades. I've been hoping to find an exit excuse but one has not presented itself.
The "good" thing about owning the same place for 20+ years is that we have a long-term maintenance plan and there are no surprises. The "not so good" thing is dealing with the typical hassles of tenants, maintenance, and repairs. We enjoy home-improvement projects, but when spouse and I go to open houses we usually realize right away that we're not ready to tackle yet another property.
I can't imagine the responsibility of owning a vacation home. The insurance, care of vacant property, and other issues would drive me nuts. As another poster mentioned, rental condos are cheap & ubiquitous.