Interesting perspective I have here. I'm a "numbers guy" and the numbers fooled me into buying a poor property. Had 4 evictions in 3 years. Sold for a huge profit though.
The way I see it, operations matter a lot (tenant selection and management). If you can get it to work, affordable housing is going to offer a good ROI.
And although it's called "slum lording" by its detractors, you're providing a very needed service.
So how can one good be a good operator in affordable housing?
Some entitled people on here think all lower rent properties are slum lord owned. Truth is, you can be a slumlord with tenants paying $3,000 a month in a million dollar property. A slumlord describes the landlord who doesn't maintain the property up to building code and habitability standards, and who doesn't respond to tenant requests for service and maintenance.
The location of the property, amount of rent collected, value of property, or income of the tenant is NOT what defines a slumlord. Please don't perpetuate this erroneous definition.
To be a good operator, you provide a safe, clean, sanitary, well-maintained property at affordable rents, AND you screen and only retain tenants who abide by your rules and treat the property and neighbors respectfully.
^Ray nailed it
I worked for a slumlord. He wrote the book.
1. Treat the tenants like dirt. Make derogatory remarks about them, their families, etc.
2. Do not bother repairing anything. If the tenant threatens to call the Health department, see step 3.
3. Intimidate and threaten rather than go through proper channels to evict. Threats to call the police, Immigration work well. Illegal lock outs work as well. This type of tenant rarely calls the police on a landlord, and the police have better things to do.
Providing a basic, sanitary, safe roof over their head, with heat, and a place to cook for a reasonable price, is not being a slumlord.