There might be multiple answers to your questions. However one thing for sure is that you don't want to rent this house for the following reason:
1) $2200 rent vs. $400k+ property is not right ratio
2) recurring cost is high such as $430 monthly for property tax and insurance. This is not good for rental property.
3) It will take a long time to appreciate based on your current assessment unless you anticipate much rapid recovery rate in your area.
- question is: how long is it going to take to get this property appreciated $90k?
4) More importantly, it's hard to convert rental back to owner occupied house if you want to sell again:
- It will be vacated for several months without income.
- It will take major effor to renovate to restore the condition.
Sometimes, you need to take loss and move on. With freed up $150k cash, I believe you can do much better on other rental properties with high value and low cost.
