I spray mine with lysol and let it dry thoroughly (you don't want the bird to breath chemical vapors). I know a breeder who was been in business for 30+ years who uses a bleach solution to sanitize cages, toys, etc.
There are probably those who would disagree with using either of these methods, because chemicals are involved.
I think there are trade-offs involved with sanitizing. Birds are sensitive to chemicals, but they also can catch common bacterial infections (strep) and viruses (common cold). Food dishes, toys, perches, grates are all perfect cultures for growing bacteria. Water will not kill bacteria (220f for a period of time would work, but not hot tap water)...it will probably help it grow.
I think there are other threads on here that discuss sanitizing, in general. I'd be curious to read what others think.