When Albert Einstein published his Special Theory of Relativity in 1906, he overturned centuries of certainty associated with Newtonian physics. Something similar occurs every time I show groups of potential tenants some of my properties.
Our relationship to property can offer considerable insights into human nature but the reverse is also true – understanding human psychology can help you succeed when it comes to property. Let me explain what I mean.
It would seem to be an immutable law of “Newtonian” economics that the customer desires the best product at the lowest price, but there are many occasions when this is not the case.
Consider you are showing around a group of tenants (students or young professionals) looking to share a period property. Inevitably there is some variation in bedroom sizes and this is likely to lead to a problem – if there is a particularly small bedroom, nobody will want it unless the rent for this room is discounted.
The idea that someone in the group could enjoy a significantly larger room than theirs at no extra cost is enough to cause groups of 'friends' to self-combust
Depending on the dynamics of the group, this could pose an insurmountable problem with no one prepared to take that small bedroom, whatever the saving.
That’s fair enough. But consider the reverse. Let’s say your property has four good-sized bedrooms and one that is exceptionally large. Now there is surely no problem because the big bedroom is a “bonus” offered at no additional cost.
But human nature does not work like that. Even the most conservative-minded professionals are likely to turn hard-line communist when confronted with house-sharing arrangements. In my long experience, what matters above all else to house-share groups is “equality” of room size.
The idea that someone in the group could enjoy a significantly larger room than theirs at no extra cost is enough to cause groups of “friends” to self-combust in resentment and indignation. Groups often prefer to take a property with smaller, but more “equal” bedrooms than suffer the frustration of just one of them occupying a much larger bedroom. Clearly notions of privilege and unfairness are deeply rooted in our psyche.
This is where the theory of relativity comes in. After securing a property someone could lie back in their lovely bedroom with their arms tucked behind their head congratulating themselves on the fact that people in other properties for exactly the same cost could now be lying in a smaller bedroom, how lucky am I! And, what’s more, one of their housemates also enjoys an extra large bedroom. This perspective aligns with “Newtonian economics”.
But no, the special relativity of human nature means the tenant will focus on that super-large bedroom of their friend and judge their own bedroom “small” in comparison and consequently over-priced. I’ve discovered when I am showing groups a property with an exceptionally large bedroom they do not exclaim, “That’s great! So pleased one of us will get to enjoy this wonderful room!” Rather they stop, carefully consider and ask, “Is the rent higher for this room?”
Newtonian economics would suggest that the group could not possibly wish to pay extra for this bonus feature, but the special relativity of human nature works differently. If you answer, “No, actually it’s the same rent”, you can almost feel the words “But that’s so unfair! Especially if I don’t get it!” burst into the minds of the viewers.
In these circumstances I almost feel encouraged to say, “Don’t worry, there is of course an extra charge for this room,” just to give the viewer psychological calm and close the deal.
It’s a well-noted feature of human psychology that if people are asked whether they would prefer to earn €30,000 a year while their friends are earning €25,000 or else to earn €35,000 while their friends earn €40,000, they more commonly plump for the former. We compare ourselves – and gain our sense of worth and well-being – not against a vague nationwide average, but in comparison with those in our immediate vicinity. The same psychology acutely applies to property.
In the immortal words of US author Gore Vidal, "Whenever a friend succeeds, a little something in me dies". It's a maxim worth bearing in mind the next time you consider the dynamics of house sharing. Groups of friends love to live together . . . just so long as one friend is never more equal than the others.
Damian Flanagan is a property developer, writer and critic