Do Rentals Hurt Neighborhood Property Values?

[Colin Reid]

I'm just getting started in investing. I have a rental already, but I'm shopping for my first property that I'm buying expressly as an investment. My current rental is my last residence.

My realtor showed me 5 houses today. One was right down the street from a friend of mine in a very nice neighborhood. I texted my friend to ask about HOA and/or covenants (there are none, thankfully) and he said, "don't be [buying rentals] in my neighborhood if that's gonna drive down my property value please."

We discussed it a bit and he's under the impression that renters don't care about the property, trash the place, and hurt property values. He said that he and his wife chose the neighborhood partly because there were not many rentals. I have no idea how he knew that, but he said so. Apparently, a few other properties on the block got rented out and lots of owners weren't happy about it.

Much of what he said sounds like hearsay, not based in evidence, but is there any truth to it? I don't expect it will factor in to my decision to buy or not buy that property, but I am curious.