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The French poet and philosopher Paul Valery once stated, “The purpose of psychology is to give us a completely different idea of the things we know best.” And because there’s nothing landlords know better than renting homes, perhaps its time for some different ideas when it comes to getting out in front of the competition. Can psychology be used to provide landlords with the competitive edge? Some experts believe when it comes to pricing and enticing certain emotions from residents the answer is YES.
Let’s first take a look at how the psychology of pricing can aid landlords and property managers in setting the perfect price to get their homes rented faster than their competitors.
Experts say there is a psychology to numbers and pricing and many professionals have relied on this psychology for centuries when it comes to consumer pricing and marketing products. There is a concept known as ‘left digit anchoring’ which retailers use to market their goods and get the best perceived pricing. For example, an item priced at $3.99 is perceived to be far cheaper than the same item priced at $4.00. In reality, the difference is of course a mere penny, but researchers say that in the minds of the consumer, the perception is of real savings. Of course, the primary factor driving this concept of ‘left digit anchoring’ has to do with the first digit being lower and causing the consumer to initially perceive a lower price, but same or similar value. The same can be said when pricing rental homes. Pricing a home at $1200 is perceived by the average renter as a higher price than that same rental priced at $1199. Perception rather than reality is the key and could be the difference that landlords need to rake in an advantage over the competition.
There are other intuitive – but not obvious – factors that affect perceived pricing. Shorter numbers appear smaller; for example, $1199 is subtly perceived as lower than $1,199, and similarly $1,199 is perceived as lower than $1,199.00. Landlords interested in knowing more about how this and other psychological pricing tactics work can click here to read more.
What happens once you’ve gotten the price just right based on your ‘left digit anchoring’ tactics? Hopefully, you have now amassed enough of a crowd to begin your home tours. But after those incredibly skillful jedi mind tricks, you’ll need something more to seal the deal than the usual builder-beige colored walls to entice them to sign on the dotted line. While the competition is drowning in the drabness of the once popular ‘neutral’ colors, you may want to take advantage of color psychology to help entice potential prospects to sign with you instead of the competition.
Color can cultivate certain emotions. Each room has its own personality and can, with the right colors, elicit certain emotions from the people spending time in those rooms. For instance, muted shades of green, blue and lavender are known to create a calming effect. When done right, using one of these colors in a bathroom can present a spa-like atmosphere. Who wouldn’t want to have that spa experience in their own home?
Brighter colors such as reds, oranges and yellows are believed to be more inviting and are generally recommended for rooms where people tend to gather such as family rooms and kitchens. Also, color experts say choose room colors according to square footage in the room as well. Lighter colors can make a smaller room appear larger and darker colors can bring a sense of coziness to a larger room.
There are also inexpensive but ornate personal touches that can be added to any home to give it personality and make it stand out in prospective renters’ minds. Whether using distinctive knobs and handles on doors, cabinets and drawers, or 1950s-aesthetic appliances, or Cuban-inspired leaf-shaped fan blades, there are countless ways to add personality and fun quirks by choosing everyday objects with care.
Use your knowledge about renters in your area along with your newfound knowledge of pricing and color psychology to give your prospects what they want long before they or your competitors know what hit them. In this highly competitive rental market, psyching out the competition sounds like a good idea.
What tricks and techniques have you borrowed from other professions to gain the advantage over your competitors? Have you tried these pricing and use of color techniques in your homes?
Related Reading:
5 (Relatively) Cheap Upgrades to Boost Market Rents & Property Values
How to Effectively Market and Rent to Millennials
