Besides the low rent she pays she is very demanding, pays late and is not taking good care of the property.

This either provides opportunities to invest in more real estate, rehab a property(s) or for personal use.You can also sell low performers to do the same.

So no, I wouldn't pay any of those low-interest notes off.

“The availability of affordable housing in Phoenix has plummeted very quickly and very dramatically,” said Maxine Becker, an attorney at the Wildfire Community Action Agency, a group that advocates for low-income residents of Arizona.Evictions are seen in virtually every community, from residents in their early 20s to retirees.

If you’re a millionaire liquidity is a small part of your investment strategy since the return is low.  

In my opinion, this area is a melting pot, there is low income, high income, and short term rentals all mixed together. 10-15 years ago, I wouldn't have gone to this area alone to work, but it has gotten a lot better and I have never felt unsafe while working in this area alone. 

I said around 200-250 and she replied that seemed low (which was quite discouraging)

There are, more or less, three things you can do (other than just sucking it up and going with the low appraisal):1) Try to convince the appraiser to increase the appraisal.

To begin, I am considering renting my primary home because the loan is at a low interest rate, and the cash flow, based on comparable rentals in the area, is promising. 

Best way to mitigate a lot of the downsides of low income neighborhoods is to go with Section 8 tenants instead of cash paying tenants.Rent is higher.