Inventorying the condition of the rental property @ the beginning and end of the tenancy, is an excellent device to protect both you and your tenant when the tenant moves out and wants the security deposit returned. Without some record as to the condition of the unit, you and the tenant are likely to get into arguments about things like whether the kitchen linoleum was already stained, the garbage disposal was broken, the stove was filthy or the bathroom mirror was already cracked when the tenant moved in.
The checklist provides good evidence as to why you withheld all or part of a security (or pet) deposit. And coupled with a system to regularly keep track of the rental property's condition, the checklist will also be extremely useful to you if a tenant withholds rent, breaks the lease and moves out or sues you outright, claiming the unit needs substantial repairs.
Taking photos or videotapes of the unit before a new tenant moves in is another excellent way to avoid disputes over security deposit deductions.
Be sure to keep the checklist up to date if you repair, replace, add or remove items or furnishings after the tenant moves in. Both you and the tenant should initial and date any changes.