Checklists are used to establish a baseline of damage to a rental. When the tenant moves out, damage is again assessed on the same checklist to determine what, if anything, changes exist that need to be repaired or replaced. Landlords use move-in checklists both to monitor the condition of the home, and to fairly assign damage expenses to tenants.
Typically, a tenant has 7 days after move-in to fill out a checklist and return it to you in order to document any damage to the rental, but each state has specific timelines. Make sure the tenant signs a copy of the checklist and retain it for your records until after move-out. If you do not use a move-in checklist, it becomes very difficult to validate in court whether a tenant was responsible for any specific damage to the rental, since there would be no documented baseline. Taking video or still photos of the rental both before and afterwards is also a great idea to protect your interests.

Here's a typical courtroom scenario where there is NO checklist:
Judge: Mr. Tenant, did you punch a hole in the wall?
Tenant: No Sir. I've never caused any damage. I don't even have fists to punch with!
Judge: Mr./Ms. Landlord what evidence do you have that the tenant committed this specific damage?
Landlord: Um…I remember what it looked like before…
Judge: Do you have any proof?
Landlord: Nope. Just what I remember.
Judge: Well, you've shown no proof that the tenant caused any damage. Case dismissed in favor of the Tenant.
Or, if you have a checklist, video and still photos:
Judge: Mr. Tenant, did you punch a hole in the wall?
Tenant: No Sir. I've never caused any damage. I don't even have fists to punch with!
Judge: Mr./Ms. Landlord what evidence do you have that the tenant committed this specific damage?
Landlord: Well, here's a video of that same room prior to the tenant's moving in. You can see the room is freshly painted and there are no holes in the wall. Here's a copy of the move-in checklist where the tenant certifies there is no damage; please note the checkbox next to "Walls = No problems / Great Shape". And, Your Honor, the tenant's hand is in a cast.
Judge: Case decided in favor of the landlord.