In addition, just because rents spike doesn't mean your tenant received a comparable bump in pay.

We plan to remove the carpet next year and install LVF to increase property's value and potentially bump the rent. 

I'll bump this again as I like haunted property stories!

In the lifespan of your investing if you continue investing this speed bump will become smaller to you.

Rates fell off a cliff in August only to bump back up to just shy of where they were at that point in the last two weeks. 

Are you seeing a similar small bump in income, or is it more significant in your area?

I see a few challenges arising with this type of set-up.If for example, he/she doesn't do a good job or if you no longer need their services or if a conflict arises between landlord and manger.Is their a way to structure the managers pay without bumping in to challenges later on?

However, if you're rental rates are close to the market rates my suggestion would be to set them at $1375 and then bump them up next year upon renewal another 2-4%. $25/month over the course of the year is only $250 and you'll likely lose that amount in turnover costs if one decides to move out. 

Prior comment of getting 15% in these investments - honestly I don’t see it because of the burden of the overhead to deal with small dollar investors.We started our fund At $500 and quickly bumped it up to now it’s $5,000 because of the costs of dealing with these small dollar investors was to excessive.

All businesses can hit speed bumps during any growth period.