The principle return is the cumulative principle payments on the loan each year building equity.  Say you put 10000 down on the house and you pay 1500 a year towards principle payments, that is a 15 percent principle return, as opposed to cash on cash which is your net cash position after all expenses including loan payments (to include interest and principle payments deducted), but before taxes.

I would recommend talking to your banker first and find out if he has any clients that are buying rental houses and having them property managed.  If you can find out through him who they are using for property management, or better be able to talk to the clients directly you can get a feel for how happy they are with their management company, if they have used other companies before which ones and what did they think.  I would say it is better to get information from someone with 20-30+ homes than 5, it has taken time to accumulate more and they have more experience from it.  Furthermore take the opportunity to learn from those people what works and what does not.  Take them out to eat and pick their brain.  I have sat down with a friend's kids who are wanting to get involved in rentals and they asked me questions for 2 hours nonstop.   They bought a house less than a week later.

As far as terms they are going to vary, but we charge 8% of gross and half of 1^st month’s rent anytime there is a new tenant.  Our hourly rate is $30 an hour for labor, which is only $5 more than our cost.  I believe generally speaking we are under market on our rates as a whole.  But the quality of service provided is exceptional.  One package of over 30 homes we manage had a ~%98 occupancy rate for 2015.  I think this is ~3-5% better than their previous company they used.  Delinquency payments on rent are also quite limited compared to others I have talked to.