VRBO doesn’t work any harder to process our payments, but they are getting a lot more money than they are from less expensive rentals.  

I am curious about any differences in management, expenses, risks, etc..

I have some cash saved so I can look into a multifamily in a cheaper area as well. ( I'm by the coast so everything here is expensive) C) Keep this one but rent it out completely and buy another property as my primary ( possibly in a cheaper area).

If you're not familiar it basically recommends that you have a bunch of bank accounts (income, profit, owner's pay, taxes, and operating expenses) and when money comes in you distribute it among your bank accounts in some predetermined percentages (profit first of course!)

There was a hail storm this spring and evidently that has kept them so busy that even highly rated (expensive) contractors wont even call me back.  

I wonder if the thought is that by replacing those tenants, my maintenance and repair expenses drop, thus increasing the NOI and value.

Cosmetic work is easy to do and not too expensive.   

I'm not as experienced as most here but to me your expenses look too low, 3% vacancy and 1% CapEx especially.

I've been searching all over California (I live here, just north of LA) and there are some pockets where the properties aren't massively expensive.

However, you can still create your own LLC or Sub Chapter S Corp through which can you run the income through and still deduct your investment-related business expenses through.