But generally, human psychology is left out of the conversation.

Lot's of psychology involved in this from placement of opt-ins to images.  

I agree with your sentiment, but there's a big difference between an "investor" and a "business owner" in terms of expectation, skillset, and psychology.  

Compassion tells me to give her a chance to pay more and stay, psychologically a tenant would need a reason to pay more rent, even though they have been paying a third of market rent so far.  

Is it because of all of the psychology around fossil fuels, "climate change", and such?  

I would never purchase a property where there was any possibility of extended economic vacancy...for both financial and psychological reasons.  

The key to understanding this concept is not the numbers but the psychology of investing and how people do not accumulate shares of a company over time rather they sit on their ONE time purchase at a low share price and brag about their cost basis.   

Sellers at that time did not like this, especially when they were getting signed agreements from other buyers offering sometimes $100k over appraised value. now, in 2022, with things slowing down, FHA/ VA is not looked at as a black-eye as muchhhh as it was the last couple of years, but FHA also kind of has a stigma of being associated with less-qualified buyers. they allow for lower credit scores, higher DTI's, lower down payments.... its a psychological thing. if you have the ability to do 5% down instead of the FHA minimum of 3.5% down, you'll end up in an overall better loan (less mortgage insurance) with a lower payment. plus, FHA eats up 1.75% of your equity just off the bat with the up-front mortgage insurance that conventional financing does not have. 

Below is a paraphrased story this pizza joint had printed on their tables:A psychology graduate student needed 50 participants to partake in a one hour long survey. 

I know it seems counterintuitive to raise the rents to get more tenants but a lot of time psychology is at play here.