Property Management Fees

[Terri O'Brien]

I am currently looking into my first deal out of state in a small town back east where the majority of the duplexes and apartments are owned by one family.  They have quite a bit of section 8 housing and they have offered to sell me a couple of their duplexes, fully rented, and offered their property management services as well.  They have been managing these houses and tenants for 20 years.  Their property manager charges 15% plus 100% of the first month's rent on any unit that becomes empty and is re-rented.  Is this the going rate?  So if a tenant moves out, I lose that month's rent and in addition I have to pay another month's rent to the property manager for finding a tenant?  I just need some guidance before going into this.  Also, since the tenants are Section 8, the rents are $550.00 a month.  She is willing to sell me each duplex for $60,000, which after running the numbers on the Rental Calculator, will not work, but I was thinking of also negotiating her fee.  Let me know your thoughts.