• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

‘We are legal residents’

Presumably seeking the benefits of steady cash flow, Rahman accepted a long-term booking for her Durham rental property from Oct. 25, 2023 through May 24, 2024.

Her guests paid what they owed through the Airbnb platform, but when her cleaner went to the property after the checkout time, the couple had not moved out and they told the cleaner not to return. When Rahman visited the property the next day with the police, she found a hand-written note stuck to the front door.

It read: “No trespassing. We will vacate the property when you have filed the proper paperwork with the civil magistrate for an eviction for we are legal residents of this home. If you try to enter, we will press charges for violation of expectation of privacy.”

First, Rahman reached out to Airbnb for help. The platform advised her to prioritize her personal safety and work with local law enforcement to resolve the issue. When police could not remove the squatters, she initiated the judicial eviction process.

Guests who continue to live in a rental property after their lease agreement has expired are deemed holdover tenants. This poses significant risks for landlords, including loss of rental income, property damage and lengthy (and costly) legal disputes. The best course of action to get rid of an obstinate holdover tenant is to begin the eviction process as quickly as possible and with the help of a local attorney.

In North Carolina law, a squatter must occupy a property for a continuous period of 20 years before they can legally create an adverse possession claim.

In Rahman’s case, they’ve only overstayed their welcome by a number of weeks so their efforts to take over the property will likely fail in court — but the longer they stay, the more rights they will slowly develop. An eviction hearing was scheduled for the week of June 13.

Don't miss

Stress-free ways to invest in real estate

If the idea of becoming a landlord and dealing with all the stresses related to that — from managing bookings to fixing appliances and, in Rahman’s case, dealing with unruly tenants — does not appeal to you, there are other ways to invest in real estate and reap the benefits of passive income.

For example, you can invest in a residential real estate investment trust (REIT), which are publicly-traded companies that collect rent from tenants and pass 90% of their income to shareholders in the form of regular dividend payments.

You might also consider crowdfunding platforms, which allow everyday investors to pool their money and finance real estate projects and buy shares of properties or private REITs. All investors then stand to benefit from the rental income that the property produces and capital appreciation. This is thought to be a riskier way of investing in real estate since there's liquidity constraints, no guarantee of any income and not a lot of regulations.

With both types of platforms, you can reinvest the dividend or rental income to increase your holdings and build your wealth, or you can use that income to support your lifestyle and financial goals. Rahman, for example, implied that she relies on her rental income to help fund her son’s college education.

The nice thing about these options is how passive they are for individual investors — especially when compared to being an actual landlord and running a rental property.

What to read next

Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.