I mentioned this to the tenant and gave him notice of the higher rent. 

That is 4 months' of ALL of your rent to place a new tenant (not to mention the time the unit probably sat empty while they were filling it).So in a year where you had turnover, your PM expenses would be $1,200 + 12x$120/month, for a total of $2,640 in PM expenses for the year.  

As others mentioned they are not squatters but hold over tenants. 

Since you mentioned your W-2 income is above the threshold, it’s likely that you don’t qualify for this status, so the losses would be suspended and carried forward to offset passive gains in the future.With REPS and 500 hours of material participation in your LTRs activity, you can release your losses from LP interest.

As well as what Madri Koppe mentioned.

Is the property mentioned currently licensed as a STVR?

Having your handyman do showings could be a solution, but keep in mind that if he’s not experienced in tenant screening, it could expose you to more risk, especially with squatters or less reliable tenants.You mentioned using something like Showmojo for smart access, which is great for efficiency, but I’d suggest ensuring you have solid procedures for background checks and tenant screening if you go that route.As someone who’s owned a property management company for 5+ years and manages over 300 units, I’ve seen the impact of not properly screening tenants.

I'd echo what @Gino Barbaro mentioned above.

I would love to make legal exceptions for people who want to do better, but I can't for reasons already mentioned.

As someone else already mentioned here: focus on saving!