How to Conduct a Move-Out Inspection Properly: The Landlord's Complete Guide to Protecting Your Investment

By PropsManager Team · Property Management · Aug 27, 2024

I've lost count of how many landlords I've talked to who've had a judge throw out their security deposit deductions because their move-out inspection was sloppy. We're talking $800, $1,200, sometimes $3,000+ in legitimate damage charges — gone — because they didn't follow a proper process.

Here's the thing most landlords learn the hard way: it doesn't matter if the tenant trashed the place. If your documentation doesn't hold up, you're writing a check back to someone who left cigarette burns in the carpet.

A 2023 survey by TransUnion found that security deposit disputes are among the top three reasons tenants take landlords to small claims court. And landlords lose roughly 40% of those cases. Not because the damage wasn't real — but because they couldn't prove it properly.

This guide will walk you through exactly how to conduct a move-out inspection that protects your investment, keeps you legally compliant, and gives you ironclad documentation if things end up in front of a judge.

Why the Move-Out Inspection Is the Most Important 30 Minutes of a Tenancy

Think about it. You spent weeks screening applicants. You ran background checks. You drafted a solid lease. You handled maintenance requests for a year or two. And now it all comes down to a single walkthrough that most landlords rush through in 15 minutes.

The move-out inspection is where the rubber meets the road on your security deposit. It's the moment that determines whether you recover $2,400 for that destroyed bathroom vanity or eat the cost yourself.

Beyond deposit deductions, a thorough move-out inspection also:

• Sets the baseline for turnover costs — you can't scope renovation work until you know exactly what needs fixing
• Creates legal protection against frivolous tenant lawsuits
• Identifies hidden damage like mold behind furniture, pest issues, or plumbing leaks that weren't reported
• Documents the property's condition for insurance claims if something major comes up
• Establishes professionalism that discourages tenants from disputing legitimate charges

Skip it or half-ass it, and you're rolling the dice on every single turnover.

Step 1: Schedule the Inspection at the Right Time

Timing matters more than most landlords realize. You need to inspect after the tenant has moved all their belongings out and completed any cleaning, but before you or your crew starts any turnover work.

This window is critical. Here's why:

If you inspect while furniture is still in the unit, you'll miss wall damage behind the couch, carpet stains under the bed, and scratches on the floor where the dining table sat. I once missed a massive red wine stain on carpet because the tenant still had an area rug thrown over it during a pre-move-out walkthrough. That cost me $650 when I had to replace the carpet padding in the bedroom.

If you inspect after turnover work has started, a tenant's attorney will argue you can't distinguish between existing damage and work-related wear. They'll say the painting crew caused the wall holes, or that the cleaning crew scratched the countertops.

Best Practice: Schedule Two Inspections

The gold standard is actually two inspections:

1. Pre-move-out walkthrough (7-14 days before lease end): Walk the unit with the tenant present. Point out damage you see. In many states like California, this is actually required by law. Give the tenant an itemized list of issues so they have a chance to fix things before the final inspection.

2. Final move-out inspection (within 24-48 hours of key return): This is the big one. The unit should be completely empty. Document everything.

Some states — California, Maryland, Georgia, and others — have specific legal requirements about when and how you must offer a pre-move-out inspection. Ignoring these requirements can cost you the right to withhold the deposit entirely.

Coordinate With the Tenant

Always invite the tenant to the final inspection. Put it in writing — email or text, something with a timestamp. Even if they don't show up, you've covered yourself legally by proving you offered.

Pro tip: if the tenant does attend, you handle disputes on the spot. They can't later claim they "didn't know about" the hole in the bedroom door if they were standing right there when you photographed it.

Step 2: Bring Your Move-In Documentation — Every Single Page

This is where most landlords blow it. You walk in with your phone and start snapping photos, but you have nothing to compare against. Without the move-in condition report, every deduction becomes your word against theirs.

Here's what you need in hand:

• The original move-in inspection report with photos and notes
• The signed lease agreement (particularly clauses about cleaning requirements, paint, and pet damage)
• Any maintenance records showing what was repaired during the tenancy
• Photos from the move-in day — ideally time-stamped

If a scratch was there on day one, you can't charge for it on day 365. Period. Judges are ruthless about this. I watched a landlord try to deduct $1,800 for hardwood floor damage, and the tenant pulled up their own move-in photos showing the same scratches. Case dismissed. Landlord paid court costs on top of returning the full deposit.

This is exactly why understanding wear and tear vs. property damage is essential before you even start the inspection. The line between the two isn't always obvious, and getting it wrong means losing in court.

Step 3: Use a Standardized Inspection Checklist

Don't wing it. Every single move-out inspection should follow the same standardized checklist. This serves two purposes: it ensures you don't miss anything, and it demonstrates to a judge that you follow a consistent, professional process.

Your checklist should cover every room and every component. Here's a comprehensive breakdown:

Room-by-Room Inspection Checklist

Don't Forget the Details

It's the small stuff that adds up. Check inside the oven. Pull out refrigerator drawers. Look behind the toilet. Open every kitchen drawer. Test every light switch. Run every faucet. Flush every toilet.

I once found $400 worth of damage inside kitchen cabinets that I would have completely missed if I'd only done a surface-level walkthrough. The tenant had stored leaking bottles of cooking oil on the shelves, and the wood was warped and stained beyond repair.

Step 4: Photograph and Video Everything — Like a Crime Scene

I'm not exaggerating with the crime scene comparison. Your documentation needs to be that thorough.

Photography Rules

• Take wide shots first, then close-ups of damage
• Include context — a close-up of a scratch means nothing without a wider shot showing which wall or floor it's on
• Photograph every room even if it looks perfect. Absence of damage is evidence too.
• Use consistent lighting — turn on all lights, open all blinds
• Capture timestamps — most phone cameras do this automatically, but verify your settings
• Shoot minimum 50-100 photos per unit. More for larger properties.

Video Walkthrough

In addition to photos, record a continuous video walkthrough of the entire unit. Start at the front door and methodically work through every room. Narrate as you go: "This is the master bedroom, south wall. You can see three large holes approximately 2 inches in diameter that were not present at move-in."

The video serves as your backup. If a photo is blurry or you missed an angle, the video often catches it. Plus, a narrated video is incredibly compelling evidence in small claims court.

Pro Tip: Use a Digital Inspection Tool

Pen and paper inspections were fine in 2010. They're a liability now. Handwritten notes get lost, are hard to read, and don't exactly scream "professional operation" in front of a judge.

PropsManager's inspection features let you conduct the entire move-out inspection on your phone or tablet. You take photos directly within the app, annotate damage on a digital floor plan, and generate a professional PDF report on the spot — complete with timestamps and side-by-side comparisons to the move-in condition. The tenant can sign electronically right there during the walkthrough.

That report becomes your single source of truth. No scattered photos, no lost checklists, no "I think I took a picture of that."

Step 5: Test Every System and Appliance

Photos capture visual damage, but they don't tell you if the dishwasher leaks or the garbage disposal is jammed. You need to physically test every system in the unit.

Testing Checklist

• Turn on all stove burners and the oven — let them heat up for a few minutes
• Run the dishwasher through a quick cycle
• Test the garbage disposal — listen for grinding noises
• Flush every toilet — check for running, leaks at the base
• Run all faucets — hot and cold, check for drips and water pressure
• Open and close every window — check locks and screens
• Test all blinds and window coverings — raise, lower, tilt
• Check every light fixture and switch — including dimmer switches
• Test smoke detectors and CO detectors — press the test button
• Run the HVAC system — both heating and cooling if applicable
• Open and close all doors — check for sticking, damage to frames
• Test the garage door opener if applicable
• Check all outlets with a plug tester ($8 at any hardware store)

This testing phase takes an extra 15-20 minutes, but it's caught thousands of dollars in hidden damage across my portfolio. A tenant once returned keys to a unit where the oven's heating element was completely burned out. Without testing, I wouldn't have discovered it until the new tenant moved in and called me Christmas Eve to say they couldn't cook their holiday dinner. That's a $250 repair I would have eaten because I couldn't prove the previous tenant caused it.

Step 6: Get the Tenant's Signature

If the tenant is present for the inspection — and you should always try to make that happen — have them sign the completed inspection report on the spot.

Their signature doesn't mean they agree with everything. It simply acknowledges that they were present and saw the documented conditions. This is powerful legal protection.

Here's the language I use on my inspection forms: "Tenant acknowledges presence during this inspection and has reviewed the documented conditions. Signature does not constitute agreement with any security deposit deductions."

If the tenant refuses to sign, note the refusal on the form, including the date, time, and any witnesses present. Don't argue. Don't pressure them. Just document it and move on.

If the tenant isn't present, mail or email a copy of the completed inspection report to them within 24 hours. Keep proof of delivery. In many states, you're legally required to provide an itemized statement of deductions along with any remaining deposit balance within a specific timeframe — usually 14 to 30 days.

Clear, detailed documentation from your move-out inspection is exactly why clear communication is your best legal defense when disputes arise.

Step 7: Calculate Deductions Accurately

This is where landlords get greedy and lose. You can only deduct for actual damage beyond normal wear and tear, and only for the depreciated value of what was damaged.

Common Deduction Mistakes

• Charging for normal wear and tear. Faded paint after a 3-year tenancy? That's wear and tear. Small nail holes for picture hanging? Wear and tear in most states. You can't deduct for these.
• Charging full replacement cost. If the carpet was 5 years old with an expected 10-year lifespan, and the tenant destroyed it, you can only deduct 50% of replacement cost. The carpet was already half depreciated.
• Not itemizing deductions. "Cleaning and repairs — $1,500" won't fly. You need line items: "Carpet cleaning, master bedroom: $175. Replace damaged blinds, unit 3 windows: $85 each ($255 total). Patch and paint living room walls, 12 holes exceeding normal wear: $350."
• Deducting for pre-existing damage. This is why Step 2 matters so much. If you can't prove the damage wasn't there at move-in, you can't deduct for it.

Sample Deduction Breakdown

Here's what a solid, defensible deduction statement looks like:

Every line item should be supported by your inspection photos, the move-in report comparison, and ideally a receipt or quote from the contractor doing the repair.

Common Mistakes That Will Cost You in Court

After 15+ years in property management, I can tell you the mistakes repeat themselves. Here are the ones that burn landlords the most:

1. No Move-In Report to Compare Against

If you didn't document move-in condition, you've essentially forfeited your ability to make deductions. Start every tenancy with a detailed move-in inspection — it's half the battle.

2. Waiting Too Long After Move-Out

Inspect within 24-48 hours of the tenant returning keys. Waiting two weeks opens the door to claims that damage occurred after the tenant left. Time kills your credibility.

3. Not Offering a Pre-Move-Out Walkthrough

In states that require it, skipping this step can void your entire deposit claim. Even where it's not required, offering one shows good faith.

4. Mixing Turnover Costs With Damage Deductions

Repainting between tenants because you want to refresh the unit? That's your cost, not the tenant's. Only deduct paint costs if there's damage beyond normal wear — like crayon drawings on the walls or unauthorized paint colors.

5. Poor Photo Quality

Blurry photos with no context are nearly useless in court. Take your time. Make sure every image is clear, well-lit, and accompanied by notes about what it shows and where in the unit it was taken.

State-Specific Deadlines You Can't Afford to Miss

Security deposit return deadlines vary enormously by state, and missing them can mean owing the tenant double or even triple the deposit amount in penalties. Here are some key examples:

• California: 21 days to return deposit with itemized statement
• Texas: 30 days
• New York: 14 days
• Florida: 15-30 days depending on whether the tenant disputes
• Illinois: 30-45 days depending on unit count
• Colorado: 30 days (unless lease says up to 60)

Always check your specific state and local laws. Some cities have even stricter rules than the state. Missing these deadlines by even one day can result in penalties ranging from 1x to 3x the deposit amount. On a $2,000 deposit, that's a $6,000 mistake you really don't want to make.

How PropsManager Makes Move-Out Inspections Bulletproof

Look, you can absolutely do move-out inspections with a clipboard, a phone camera, and a prayer. Plenty of landlords do. But when a tenant disputes $1,500 in deductions and you're standing in front of a judge trying to scroll through 200 unsorted photos on your phone — that's not a great look.

PropsManager's property management features streamline the entire inspection process:

• Digital checklists customized to each property's specific features and layout
• In-app photo capture with automatic timestamps and room tagging
• Side-by-side move-in vs. move-out comparisons that make damage obvious at a glance
• Automated PDF report generation — professional, court-ready documents produced in minutes
• Electronic tenant signatures captured on your phone or tablet during the walkthrough
• Secure cloud storage so your documentation is never lost, damaged, or "accidentally deleted"
• Integration with accounting to track deposit deductions and refund calculations

When it's time for lease renewals and negotiations, having documented proof of how well (or poorly) a tenant maintained the property gives you leverage and context that's invaluable.

Curious how it works? Check out our pricing plans or request a demo to see the inspection workflow in action.

Explore More PropsManager Resources

Looking for the right property management software? Check out our in-depth guides:

• Compare Property Management Software — See how PropsManager stacks up against Buildium, AppFolio, Rent Manager, and Propertyware.
• Software for Small Landlords — Built for landlords managing 1–50 units without the enterprise price tag.
• AI-Powered Property Management — Discover how automation can save you 5–10 hours per week.
• Solutions for Property Managers — Scale from 50 to 500+ units without scaling your costs.

Frequently Asked Questions

Should the tenant be present during the move-out inspection?

It's not legally required in every state, but it's strongly recommended. When the tenant is present, they see exactly what you're documenting. This dramatically reduces disputes later because they can't claim ignorance. In states like California, you're legally required to offer a pre-move-out walkthrough. Even in states where it's optional, having the tenant present — and having them sign the report — is your best protection against deposit disputes ending up in small claims court.

How many photos should I take during a move-out inspection?

More than you think. For a standard 2-bedroom apartment, I recommend a minimum of 50-100 photos. Capture wide-angle shots of every room plus close-ups of any damage. Don't forget inside appliances, inside cabinets, and utility areas. Also record a continuous narrated video walkthrough. Storage is essentially free — there's no such thing as too much documentation when you're trying to justify a $1,200 deduction.

What's the difference between normal wear and tear and tenant damage?

Normal wear and tear is the natural deterioration that occurs from ordinary, everyday use. Faded paint after a 3-year tenancy? That's wear and tear. Minor scuffs on hardwood floors, worn carpet in high-traffic areas, and small nail holes from picture hanging are all typically considered wear and tear. Tenant damage, on the other hand, is deterioration caused by negligence, abuse, or misuse — large holes in walls, pet urine stains in carpet, broken appliances, unauthorized modifications, or burns on countertops. The distinction matters enormously because you can only deduct for damage, never for wear and tear. For a deeper look, read our guide on wear and tear vs. property damage.

What happens if I miss my state's deadline to return the security deposit?

Depending on your state, the consequences range from annoying to devastating. Many states impose penalties of 1x to 3x the deposit amount if you miss the return deadline. In California, a landlord who willfully withholds a deposit can be liable for up to twice the deposit amount in damages. Some states also allow the tenant to recover attorney fees if they have to sue to get their deposit back. On a $2,000 deposit, you could owe $4,000-$6,000 plus legal fees — all because you were a few days late. Set calendar reminders. Build the deadline into your turnover workflow. There's no excuse for missing it.

Can I charge the tenant for professional cleaning even if the unit isn't visibly dirty?

It depends on what your lease says. If the lease explicitly requires the tenant to return the unit in professionally cleaned condition — and you documented the cleaning standard at move-in — then yes, you can typically deduct for professional cleaning if the tenant didn't do it. However, if the lease only says "broom clean" or doesn't specify cleaning standards, you can only deduct for cleaning that goes beyond addressing normal wear. Always tie your deduction to a specific lease clause and document the condition with photos showing why professional cleaning was necessary.

Take the Guesswork Out of Move-Out Inspections

Every turnover is a financial event. The difference between a thorough, well-documented move-out inspection and a casual walkthrough can easily be $1,000-$3,000 per unit. Across a portfolio of 10 or 20 units, that adds up to tens of thousands of dollars a year.

Stop leaving money on the table. Stop losing deposit disputes because your paperwork doesn't hold up. Start running move-out inspections like a professional — with the tools to back it up.

Get started with PropsManager today and see how our digital inspection workflow turns a 30-minute walkthrough into bulletproof documentation that protects your bottom line.