The extra 900 bucks makes a big difference in the renter’s psychology as well as covering potential damage while the $75 a month is often not a deal breaker, especially if they intend to recoup it.  

In the field of psychology, this is considered to be the availability heuristic and/or anchoring.

This is a psychological issue, not an REI one - you'll have this same hang up regardless of what route you go, everyone does in the beginning. 

There is psychological baggage that comes with that.

The only debt we have is the mortgages (2 rentals and our primary residence) so we're really battling psychology on whether it feels better to have zero debt moving forward or the cash flow from continuing to own rentals. 

That’s a psychological barrier, not really a relevant factor but we’ll see how people react.

I guess it worked for me, but I am getting to a point where I dont think I can afford another property with a negative cash flow...Thinking of selling my house and may use that 200K to buy something smaller in my neighborhood...Or can pay off my rental and move into it, its 10 minutes from my current house...I want to sell, but have a hard time psychologically to sell...I am like a hoarder who cant depart from a property...Hoarding is not a good trait for investor...

Psychology is huge in this business.

While Arena calls his critics retrograde and implies racism (many of whom probably are), I personally find it understandable on a financial/psychological level that empathy diminishes when an event like that stands to decrease the value of the biggest investment (a home) you're likely to make in your life. 

Some recent examples are Scott Sutherland, Rod Khleif (a motivational speaker as well as investor--man did he have some interesting psychology insight!)