He self manages, so not running around to show and screen allows him the time to handle maintenance tasks and deal with other issues that surround his business.

I would have handled them immediately.

If a tenant with a long lease needs to leave, I'll get a run around about rent, have to wonder whats going on, discover they [i]appear to be gone[/], then deal with handling and abandonment situation.

Check out this book to get a better handle on the metrics we use on the investor side of things:What Every Real Estate Investor Needs to Know About Cash Flow...

There are many property managers that charge 1/2 month's rent for tenant placement and then 8-10% monthly fee, so 5% and 37.5% isn't that unreasonable if he's actually handling the management and you're still receiving rents.

Having a local agent would be able to handle this for you and the commission is paid by the seller.

Summary ejectment procedures must now be handled in district court rather than magistrate court necessitating hiring an attorney to evict a lease option tenant for breach.

when it comes to personal tax return, how will this be handled if he does not generate income?

I agree mgmt. companies can be a pain, but I've posted on here before how I handled that in 4 different states and 5 different areas.

Since this is your first time, it may be very wise to seek legal advice from an attorney and even let the attorney handle the entire process.