Being an effective property manager means that you have to understand the psychology of the people who rent your properties. It's not enough to simply bring them in and show them around, you need to think about how they feel while they're doing it. You need to consider things like whether or not they like the color of the walls, whether they feel as though their space is intimate enough, and whether they believe that your facilities are clean and welcoming enough.
Basics of The Psychology of Decision Making
- Framing Effect – our tendency to place more weight on information that is presented first or framed as the best option.
- Anchoring bias – our tendency to give too much weight to an initial piece of information.
- Availability bias – our inclination to base choices on information that has been recently considered or researched.
- The Compromise Effect – our impulse when making a difficult decision (or being asked by someone else) by choosing a middle ground between two undesirable options.
Understanding your tenants psychology
A positive step to understanding your tenants is understanding the psychology of decision making. Due to the fact that a tenant may or may not spend a great deal of time examining their options, as there are a lot of them, real estate professionals are essential to present opportunities and to put your property in the forefront of their mind. Having an outstanding web presence can also be crucial to reaching potential renters. To get started, consider these basic principles of psychology in real estate.
Consider Personalization
Personalization is imperative; many companies work by offering a one-size-fits-all solution without paying attention to what would best suit the needs of each individual client. When you personalize your approach, you offer something for everyone and no one has any reason to pass up on your offer. For example, if you're going to market an apartment building, focus on why someone should live there rather than just saying it's a nice place. Showcase amenities like new appliances or plenty of nearby parks. Provide videos with 360 views so people can see everything your property has to offer.
Using your clients’ names, nicknames, and even favorite colors and hobbies can build rapport. It may also be good for business: Personalization helps people remember you—and remember you favorably. Plus, humans are hardwired to connect with other humans; personalizing will make it easier for your tenants to see you as a person (and not just the property manager). If a resident sees his or her name on a welcome note taped near their mailbox when they move in, it gives them a friendly nudge that they’re welcome there. Even if they never speak to you again, that small gesture says something important about how they should treat their home.
Priming effect
The priming effect in sales is a psychological phenomenon in which certain stimuli (or some unnoticed aspects) can have a large, measurable effect on your future behavior. In real estate, this can be used as a tool to incentivize tenants into leasing your property. These incentives are most effective when the tenant is looking for a place that already fulfills the incentive that you offer. For example, if a tenant has been looking for a pet-friendly apartment and you mention how close your building is to an animal hospital or how many dog parks are nearby, they will feel like they've won the lottery.
Another way to prime them is by providing things that make them feel at home–things such as furniture or even curtains–to get them started in their new apartment right away. Staging your unit to prime your prospects to imagine activities they will make in their future apartments such as watching TV, cooking, eating, sleeping etc, is a great way to create emotional connection.
Emotional Connection
The role emotions play while we’re making decisions is often misunderstood. On one hand, we are taught that logic and reason should trump emotion, while on the other, our emotions tell us otherwise. Studies have proven that humans have an emotional connection with a person or place and as a landlord, it is your job to create a positive connection with your tenants. Understanding their emotions will give you space and leeway while communicating with them. You can draw out their positive emotions when communicating via email or text by using appropriate emoticons (smileys), or setting up face-to-face meetings where you can give them attention and show compassion towards their needs.
Stay Professional
Professionalism goes hand-in-hand with personalization and should always come first when considering how to advertise a property. Letting your personality come through is a great way to make tenants feel more at home, but you can take it too far. It’s important that professionalism reigns supreme as well. This means always maintaining strong boundaries with all of your tenants and refraining from turning into their therapist or personal concierge service.
Avoid being overly personal; doing so could confuse things or damage your business relationships if things don’t work out. If a tenant ever wants advice on her personal life—about anything—let her know that you are there for questions regarding leasing, maintenance, or repairs and redirect her if necessary.
Incorporate Surprise
To reach a certain person's Surprise emotion, a new tenant must be introduced to something they don't expect. For example, when tenants are shown their new apartment and the landlord goes through how everything works step-by-step before they enter, it will make them feel more secure. Another way is giving someone a welcoming gift that they weren't expecting such as flowers or chocolates when they move in. Small gestures like these go a long way!
Use Proximity Effect
One simple way to make your renters want something is proximity effect. If your tenants live near an item or service, they’re more likely to want it. For example, if there’s a doughnut shop nearby, people will be more interested in buying doughnuts than if there was no store nearby. Try making proximity effects work for you by marketing items and services that are within walking distance from where your tenants already are.
Conclusion
By understanding your tenants psychology, you will be setting yourself up for a successful, long-term relationship. Setting your property apart with details and features that have positive associations with the tenant, rather than the more generic aspects can help establish trust. Providing all of the information needed to make a decision also shows that you're interested in their needs, which creates positive feelings. Taking an interest in them as people and showing appreciation for them as customers is key to making sure they're satisfied and staying at your property for years to come.