diff --git a/README.md b/README.md
index 9bf34e8f..f5a6d700 100644
--- a/README.md
+++ b/README.md
@@ -173,4 +173,4 @@ b) apache2 (if you need it for other sites on the same server)
   now you can access your local pandora instace at http://127.0.0.1:8000/
 
   we use virtual machines/lxc for development and deployment,
-  more info on that in vm/LXC_README.txt
+  more info on that in vm/LXC_README.md
diff --git a/vm/LXC_README.txt b/vm/LXC_README.md
similarity index 96%
rename from vm/LXC_README.txt
rename to vm/LXC_README.md
index 2da7f9e7..f5b3fa9d 100644
--- a/vm/LXC_README.txt
+++ b/vm/LXC_README.md
@@ -1,4 +1,4 @@
-== Installing pan.do/ra inside LXC ==
+# Installing pan.do/ra inside LXC
 
 1) Install lxc on the host (Ubuntu 16.04 or later):
 
diff --git a/vm/README.txt b/vm/README.md
similarity index 69%
rename from vm/README.txt
rename to vm/README.md
index f0ebdbef..ff055e0c 100644
--- a/vm/README.txt
+++ b/vm/README.md
@@ -1,44 +1,46 @@
-Create virtual disk of pan.do/ra
+# Create virtual disk of pan.do/ra
 
-== Preparations ==
+## Preparations
 
 Pan.do/ra VM are based on cloud images.
 You also qemu to run the vm and virtualbox to convert the image
 
-  apt-get install virtualbox qemu qemu-utils
-  apt-get install kvm cloud-utils
+    apt-get install virtualbox qemu qemu-utils
+    apt-get install kvm cloud-utils
 
 
-== Building ==
+## Building
 
 You can configure some of the arguments in build.sh once done run:
 
- ./build.sh
+    ./build.sh
 
 this will create a vdi image in pandora-r{REVISON}.vdi
 
 
-== VirtualBox Usage ==
+## VirtualBox Usage
 
 Now you can create a new VirtualBox machine,
 select Linux/Ubuntu and use vdi image as existing hard disk.
 
 Before starting up:
+
  In Network -> Adpater 1 set to Bridged Adapter with your connected controller
 
 
-== Use for development ==
+## Use for development
 
 Login via ssh or in terminal as pandora with password pandora
 
-  ssh pandora@pandora.local
+    ssh pandora@pandora.local
 
 Pan.do/ra is installed in /srv/pandora and is served with nginx on http://pandora.local
 
 
-== Update ==
+## Update
 
 to get the latest version of pan.do/ra
- cd /srv/pandora
- ./update.py
+
+    cd /srv/pandora
+    ./update.py