If a unit is not rent controlled, the least problematic way to get rid of an undesirable tenant is to raise the rent above market rent.  

There are a lot of unqualified/undesirable tenants in this market.

Answer: if you are getting action but no applications, you are either priced too high for the market in general or too high for the specifics of the house (size, location near undesirable stuff, too far from town, etc).

There are definitely pockets of town that are undesirable as there is in EVERY city.

This can lead to some very undesirable properties, tenants, and owners.

So you got your drug addicts, hookers, child molesters, rapists, thieves, meth heads, gang members and other undesirables......So the answer to your question isn't relevant to where you live.

In order to get $500 a month is net cash flow it will take you 2 multi unit properties, unless you are creative, put down a large sum of money, or are in an undesired (war zone) area.

I have no intent to do anything unethical but do not wish to be caught in an undesirable situation should I tell the lender that I WILL take possession and for some reason be unable to.

They also wanted to pinch every penny in regards to amenities and maintenance and ended up with a mostly undesirable property especially when compared to competition. 

Other than that, there are a few outdated properties visible from my place but nothing distressed or with undesirables lurking around.