Must an out-of-state owner/landlord have a local property manager?

No, out-of-state owners/landlords are not required to have a local property manager, but out-of-state owners/landlords of residential rental property must have an in-state “statutory agent” (see A.R.S. Section 33-1902.B), which is different than a property manager.  A property manager manages the property, collects rent, etc., whereas a statutory agent merely receives notices and legal service of process on behalf of the owner. If an out-of-state residential landlord fails to have a statutory agent, the landlord is subject to substantial statutory fines (i.e., $1,000 plus $100 per month) and this is also legal grounds for a tenant to terminate an existing lease.  So, as a practical matter, although an out-of-state residential landlord IS NOT required to have a property manager, it makes sense to have an Arizona property manager because s/he can be more responsive to complaints, etc.  Also, if there is an eviction, the Arizona property manager can provide testimony about the relevant facts, otherwise the out-of-state owner will need to personally appear to give testimony.  If you are an out-of-state residential landlord and need an Arizona statutory agent, go here: www.ArizonaStatutoryAgentServices.com.