Your explanation has been the most thorough I have come across, but I like the idea of scanning each receipt in and attaching it to the bill through Buildium or the rent check for each deposit so I can go back and pull it up.I used QB Online for a number of years and miss some of the reporting features of it over Buildium.  

Thank you so much for the step-by-step explanation, very helpful!

Thanks David.But your explanation raises the question:  if I am completely hands-off how would I ever  know that the PM company is acting appropriately, ethically, and effectively ?

Hopefully, this offers some explanation to those who don't understand why some newbies like me don't house hack, or why we buy out of state, or why we whine so much. 

Remember you have no obligation to give a reason for non-renewal of the lease and putting any additional explanation in your non renewal notice only provides potential amunition in a suit.

Stove, Dishwasher & Range Hood My explanation to tenants, "If you were building and buying the home these are the items that are required to get a certificate of occupancy."

You can still look nice and diplomatic, but you just don't engage in any explanations."

Really appreciate your advice and explanation. 

This is a real answer BP community, not the sorry excuse of answers and hostility towards someone who just wants to learn and understand what is actually going on in the calculations instead of mindlessly copying.I can now understand where Bob Bowling was going with his PGI explanation but clearly I didn't have the right understanding of it, so would've been helpful if he clarified such terms when it's apparent that I'm unfamiliar with the subject.  

The tenant may have a perfectly reasonable explanation for their behavior and perhaps your relationship would be entirely different once you are the owner but unless you get that feeling you should take a cautious approach and have them removed and the locks changed prior to closing.