Does the term "SLUM LORD" bother you?

[James Wilcox]

I was just wondering if anyone on BP or have heard of any investor being called a "slum lord"? Would anyone else take offense to being called a "slum lord". It puts a bad taste in my mouth personally. Below is the story that sparked the conversation for this.

My wife was talking to a police officer at work and it came up in conversation that we do REI. She mentioned about a deal we were trying to work out (C class neighborhood or less). He asked where the area was. She told him and he immediately laughed and asked if we were "slum lords". She took a little offense to it and so did I when I heard it. I have never thought of myself in that light, but obviously others may see us in that way. However, yes the place is not in the best neighborhood. However, I hope to at least provide a nice, safe residence for my tenants at my property. I obviously can't speak on the other landlords in the areas though.

This is the first time I have heard anyone calling us by that term. IMO, I have only had good relations with my tenants. Many of them are very pleased with their stay at my places. Is there a way I can change this third party perspective on my business or have I just been naive in our REI.

[Aaron Knoll]

Let me tell you how I decided to get into investing.

I was looking to buy a secondhand sailboat off craigslist. I called the guy running the ad, who said the boat had all its pieces, but they were scattered across his various investment properties in greater Salt Lake City. So, I visited 3 different properties (two SFR's, one multifamily) which could best be described as seedy. The tenants were not exactly high-class, but had all been there for years, and paid more in rent then I would have ever considered charging. They had nothing but disdain for their landlord, who they said was the most useless flake ever, and only ever came by to camp out in the basements with his kids and occasionally sail. I ended up passing on the boat.

But it was at that point that I realized: this guy probably picked up these properties 15 years ago for next to nothing, nets close to $5k/mo off of them, plus whatever his properties in Florida give him. Meanwhile, with my PhD and non-tenured academic position, I'm fighting in the rat race for the same salary, barely putting away any savings other than what I had from previous jobs and sale of my Austin home at the right time. From a career standpoint, slum lord or not, he has the right idea. And from that moment on I wanted to be a slum lord. 

Granted, I don't have the patience for bad tenants, and I like taking care of my property. So my business model mostly involves class A properties and high-earning professionals who don't want to commit to purchase. But that's a business decision, not a career decision. If you have the patience and balls to remotely manage many low-end units, and you're in it for cash flow, then more power to you. "Slum lord" is not a pejorative in my book.