Most rental owners can tell you what the tenant pays each month. Fewer can tell you what the property actually earned last year.
If you own a single-family home, a townhome or a small multi-family in the East Valley, this is for you. Maybe you self-manage with a spreadsheet. Maybe you hired a manager and glance at the monthly statement. Either way, rent hitting your account feels like proof that things are fine. Sometimes it is. Sometimes the numbers underneath say otherwise.
We manage 83 properties for 65 owners across Maricopa County, and we've been at it for 25 years. Below is what we think owners should track, why each number matters, and where Arizona law touches your books. We've kept it practical, and a few of the numbers might change how you set your rent.
In This Guide
Gross Rent Is Not the Same as Profit
Rent collected is the top line. Profit is what's left after vacancy, repairs, fees, HOA dues, insurance, taxes and the mortgage. Plenty of owners treat the first number as the whole story.
Say an owner collects $1,800 a month, or $21,600 a year. That looks great until a six-week vacancy, a $1,400 water heater and a year of HOA dues come out of it. The property still "paid rent every month" and the owner's real return is much thinner than they thought.
The rest of this post is about the numbers that close that gap.
Build a Clean Income Picture First
Start with a rent roll. It's a simple list of each unit, the lease rent, the lease dates and what was actually collected each month.
What to record every month
- Scheduled rent: What the lease says the tenant owes.
- Collected rent: What actually arrived, and on what date.
- Other income: Pet rent, late fees and anything else the lease allows.
- Outstanding balance: Anything past due, with the date it went past due.
Keep scheduled and collected as separate columns. The gap between them is your first warning sign, and it's invisible if you only log deposits.
Our team runs this on AppFolio, which produces the rent roll and owner statements automatically. If you're doing it by hand, the format matters less than doing it the same way every month.
Track Vacancy in Days, Not Feelings
Our current vacancy rate across the portfolio is 5.0%. That's a useful benchmark when you build a budget. It's also a bad reason to assume your property will hit it.
“Our current vacancy rate across the portfolio is 5.0%.”
Your own number is the one that counts. Track how many days each unit sat empty between tenants, then convert that to a percentage of the year.
A worked example
Say your rent is $1,800 and the unit sits empty for six weeks. That's about $2,700 in lost rent, and you still pay the mortgage, HOA dues and utilities during that stretch.
Now picture an owner who budgeted for 100% occupancy. That six weeks can turn into a late mortgage payment or a deferred repair. It was predictable. They just weren't watching the number.
Timing matters here
Rental demand in this market runs seasonal. It tends to peak from about October through March, when winter visitors and out-of-state relocators arrive. A lease that ends in July gives you a tougher re-leasing window than one that ends in January.
Lorenzo Hall, our leasing agent, looks at lease end dates when we set renewal terms. A 14-month lease can be smarter than a 12-month one if it moves the next turnover into peak season.
Put Every Management Cost on the Page
Owners who hire a manager sometimes lose track of what the arrangement costs them. List it out so there are no surprises.
Here's how our fee structure breaks down, split between what the owner pays and what the tenant pays:
| Item | Who pays | Amount |
|---|---|---|
| Monthly management fee | Owner | 8% average |
| Leasing fee | Owner | One-half month's rent |
| Maintenance reserve | Owner (held, not spent) | $300 |
| One-time admin fee | Tenant | $195 |
| Monthly admin fee | Tenant | 1% |
On a $1,800 rental, an 8% fee is $144 a month. The leasing fee is $900, and it's charged only when a tenant is placed and a lease is signed. Marketing, showings, screening, paperwork and the move-in inspection all happen before we're paid anything.
One thing owners get wrong in their books is double-counting. The tenant admin fees are paid by the tenant, so they don't belong in your expense column.
The reserve is a buffer, not income
The $300 maintenance reserve sits in your account as a liquid buffer for repairs. Track it as a separate line. If you roll it into operating income, your numbers will look better than they are.
Maintenance Spend: Log It by Category
Repairs are where most owners lose the thread. A $180 plumbing call here, a $240 service visit there, and by December nobody remembers what was spent.
Break maintenance into categories so patterns show up:
- HVAC: In this climate it's often your biggest repair line. We lean on Weather Masters and Moss Air Conditioning & Heating for service.
- Plumbing: Phend Plumbing handles most of our calls.
- Electrical, flooring, pool and pest: Track each separately so you can spot the one that keeps coming back.
- Turnover costs: Cleaning, paint, carpet and rent-ready repairs between tenants.
Our average maintenance response time is 24 hours, and every work order is logged in AppFolio. That means your owner statement shows what was done, when and what it cost. If you self-manage, keep the invoice for every repair. You'll want it at tax time and when you decide whether to repair or replace something.
Track cost per unit per year too. If one rental eats twice what the others do, you've learned something about the house.
Security Deposits Are Not Your Money
A deposit sits on your books as a liability. You hold it, but it belongs to the tenant until the lease ends and the law says otherwise.
Arizona caps total security, including prepaid rent, at 1.5 months' rent. We set deposits at one or 1.5 months depending on the applicant's credit, income and rental history. A tenant can choose to prepay more rent, but any fee or deposit not labeled nonrefundable in writing is refundable.
Paperwork that protects your deductions
- Signed lease copy: The tenant gets one at move-in.
- Move-in form: A written record of existing damage.
- Written notice about the move-out inspection: The tenant may attend.
- Dated photos: Taken at move-in and move-out.
If you sell the property, the deposit obligation goes to the new owner. Your closing records should show the deposits being handed over.
Late Rent and the Cost of Slow Action
Late rent is a cash flow issue before it's a legal one. Track the date rent was due, the date it was paid and any late fees charged.
Arizona law lets a landlord serve a written 5-day notice to pay when rent is unpaid. Before an eviction case is filed, the tenant can reinstate the lease by paying all past-due rent plus a reasonable late fee stated in the written lease. After filing, the tenant must also pay attorney fees and court costs. Late fees are only recoverable if they're reasonable and written into the lease.
Eviction in Arizona moves relatively fast compared to many states, but procedural mistakes can restart the clock. Every day you wait is another day of lost rent, so log each notice date and keep copies. If a tenant has paid late three months in a row, that pattern should be in your records before it becomes a problem.
Pets: Document the Approval and the Money
Say a landlord approves a dog informally. There's no paperwork and no added deposit. The tenant leaves, and the carpet and baseboards are chewed up. With no record of the approval, the owner has little to go on beyond the standard deposit.
We handle this in writing. Our pet terms are:
- Pet limit: Two pets maximum, with ESA documentation reviewed separately.
- Non-refundable pet deposit: $250.
- Pet rent: $25 per pet.
- Damage guarantee: For any pet we approve, we guarantee owners up to $1,000 in pet damage above what the security deposit covers.
That guarantee is a defined ceiling on your pet-related risk. When you build a budget, you know the worst case. Also note weight limits in condos, since HOA governing documents often set them.
HOA Fees and Rental Rules Hit Your Net Income
If you own a condo or townhome, HOA dues are a fixed cost that can swing your return. Track them monthly and watch for special assessments.
Some governing documents also cap how many units can be rented or require approval before a tenant moves in. Those rules affect how long a vacancy lasts and what management costs. Read them before you buy, not after.
We manage HOA properties and work with associations regularly. One owner wrote that we're "prompt and responsive with working with the tenant and the HOA." That kind of coordination keeps small violations from turning into fines on your ledger.
Taxes: What Changed and What to Keep
This is the area with the most outdated advice floating around. Free landlord tips Mesa, Arizona owners pass around often still mention a city rental tax.
The TPT change
Since January 1, 2025, owners don't collect or remit city transaction privilege tax on residential rent for stays of 30 days or more. There's no state or county tax on residential rent either. Your records should show no city rental tax on rent charged from January 2025 on.
Two cautions:
- Old periods still count. Taxes owed for rental periods through December 31, 2024 can still be audited and collected. Keep those records.
- Short stays are different. Rentals under 30 days still owe TPT under the transient lodging category. If you mix short and long stays, track the income separately.
Income tax records
We're not tax advisors, and the details of depreciation and deductions belong with a professional. We partner with Johnson CPA Group, and owners who want a second set of eyes on their rental income and expenses can go there. They'll do better work if your records are clean.
Picture an owner who self-managed three years with only a list of rent received. At tax time there are no maintenance totals, no vacancy dates and no cost basis. The tax bill ends up higher than a year of management would have cost.
Registration With the County Is Part of the Books
Every residential rental owner must register with the county assessor. Dropping a TPT license doesn't change that.
Registration lists your name, address and phone, the property address and parcel number, and the year the building was built. If an entity owns the property, you also list a responsible officer, partner, member or trustee. Update the information within 10 days of any change. Owners who live outside Arizona must name an in-state statutory agent. The assessor may charge up to $10 per filing.
Add a calendar reminder for it. It's a small task with a real price tag when missed.
A Simple Monthly Routine
You don't need a finance degree. You need a repeatable routine. Here's what we'd do every month:
- Reconcile scheduled rent against collected rent.
- Log every repair with date, vendor and cost.
- Update vacancy days for any unit that turned over.
- Check deposits held against your records.
- Review the owner statement for fees, reserves and HOA charges.
- Note any lease end dates within the next 120 days.
Then once a year, add a year-end review. Compare actual vacancy to your assumption, total maintenance per unit and net income after every cost. Re-set next year's rent and budget using those numbers.
Spreadsheet or Software
A spreadsheet works for one property if you stay disciplined. It breaks down at two or three.
AppFolio gives us the rent roll, owner statements and maintenance tracking in one place. ShowMojo handles showings and LeadSimple keeps leasing communication moving, so we see vacancy days from the moment a unit goes live. Our founder started in engineering before real estate, and that habit of measuring things shows up in how we run the books.
One owner put it plainly: "ProEx Realty Management has made renting out my property extremely easy. They handle everything so I can rest assured my tenants and I are happy."
When Handing It Off Makes Sense
If you're spending weekends chasing rent or sorting receipts, the math may favor professional management. For owners searching for property management Mesa, AZ, the question isn't whether the fee is worth it in the abstract. It's whether the fee costs less than what disorganized books and long vacancies cost you.
We're good at consulting on owner problems, and we're good at transitions from self-management or another manager. The goal is minimal downtime and continuity for your tenant, your deposits and your records. We cover rental properties Mesa, AZ owners hold, along with the rest of the East Valley and West Valley. If financial tracking feels harder than it should, we're open to a conversation.
FAQ
What is the most important number for a rental owner to track?
Net operating income after vacancy, repairs, fees and HOA dues. It shows whether the property is working in a way that gross rent never will.
How much should I budget for vacancy?
Use your own history first. If you don't have any, we'd model at least a few weeks per turnover and compare it to our portfolio vacancy of 5.0%.
How much can I charge for a security deposit in Arizona?
Total security, including prepaid rent, is capped at 1.5 months' rent. Any fee or deposit must be labeled nonrefundable in writing, or it's refundable.
How long do I have to return a security deposit?
You have 14 days, not counting weekends and legal holidays, after the tenancy ends, the tenant moves out and the tenant asks for it. You mail an itemized list of deductions plus any refund.
Do I still collect city rental tax on long-term rent?
No. For stays of 30 days or more, city TPT on residential rent ended January 1, 2025. Short stays under 30 days still owe tax, and pre-2025 periods can still be audited.
Do I still need to register my rental with the county?
Yes. Every residential rental owner must register with the county assessor and update changes within 10 days. Skipping it can bring penalties.