As a residential phoenix property manager, I am always surprised by the number of people considering becoming landlords without the expectation of any costs exception their mortgage. Unfortunately this mind set can cause tremendous stress to the tenant, landlord and property manager. No one can predict what the actual repairs will be during the lease and landlords can get themselves into trouble if they base the repairs off of their owner occupied experience. Let's say for example that you decide to rent out your current owner occupied property that only you (1 single person) has been living in. During your occupancy you probably rarely utilize for example the guest bathroom and most likely have not had to replace even a cartridge in there which is a standard wear and tear item. You turn the property into a rental, and end up renting to a family of 4 (and remember due to fair housing you can't decide not to rent to families) and now suddenly the guest bathroom is being used constantly. It would be a mistake if you hadn't budgeted for possible plumbing issues with that bathroom such as cartridge replacements which are a relatively common normal wear and tear item. In general a good rule of thumb is to put aside 1.5 times the rent amount towards repairs through out the lease agreement. Keep in mind however those funds do not include any normal wear and tear items that may be needed once the tenant vacates which can run from $0 to several $1000 depending on the tenant. Furthermore, make sure you save enough money to cover 1-2 mortgage payments for times of vacancy - you don't want to suddenly be surprised that you don't get your rent check yet the mortgage is still due. In conclusion owning an investment property is just like any other type of investment: Once tenant occupied, the property represents an unsecured investment which can bring about large gains but also the possibility of losses so it is best to mitigate your times of loss by preparing!
When you have a new tenant moving in to a rental property either you as an owner or your property manager should conduct a move in inspection with the tenant and a move out inspection when the lease expires. Your report should be consistent with the kind of detail you would need if the tenant decides to challenge the disposition in court. Such detail includes noting the condition of the paint, doors, baseboards, flooring, inside cabinets, landscaping etc. Make sure that you use the same report for the move in as the move out so that the same items are noted. Also, take lots of pictures right before the tenant's take possession and during the move out inspection. Be sure that the power and water are on for both the move in and move out because you can't go back once the reports are signed and add items without the tenant present.
When conducting the move out, do not commit to the tenant on what the charges will be - instead explain that you need to review all of the documentation and pictures and will call them to review once complete. Remember you only have 14 business days in Arizona to get the disposition in the mail so be sure to give yourself enough time after the move out to really thoroughly review everything. Keep in perspective that the security deposit is the tenant's money and therefore can only be applied to actual tenant damages.