We are thinking of finding some nice furniture on Craigslist and having a photographer friend take professional photos, then listing on all the VRBO websites at around $250 per night.  

If it was vacant, I'd probably need to replace the whole carpet.But, if somebody came in now and saw it with the current tenant living there, they probably wouldn't notice a thing with the tenant's furniture and rugs covering up those patches.Let's say a prospective tenant checks the place while the current tenant is still living there, doesn't see any problems with the carpet and likes it enough to sign a lease.What happens when the new tenant moves when its vacant and notices the problems with the carpet?

I had two clients, a married couple that had been antique dealers for over 30 years come over quickly and found the furniture which I thought were reproductions were actually real, they estimated the contents of the home to be worth at least $300,000 dollars, and this was in 1984 dollars. 

When a tenant is staying for a year, trust me there will be damage to the furniture.

Anytime furniture gets moved, walls get dinged.

For example, nail holes and scratches on the floor from dragging furniture are things that will come out of the deposit.

We have concrete floors, zero furniture and we have two children who live in offices with only a mattress set and office desks.

Tenants insurance covers only the tenants belongings (furniture, personal effects, etc).

After my tenants finally left we found extensive damage to the floor from their dog urinating on it plus scratches from moving furniture etc.

Not only carpets and furniture, but in pipes, ac systems, etc.The houses simply don't last as long as most and have to be replaced.Vacancy is low but that doesn't mean turnover is low.