Sell or hold this vacant rental?

[Jack B.]

6 months vacant, lowered price twice, $400 under market, still can't find a tenant for one of my rentals. Have about 300K equity in this one. 

Type of tenants it attracts are not great. Everyone want's to apply but they don't have the money. Lot's of people want to run a day care out of it, but don't want to pay business rent.

I had no issues filling 3 other vacancies, even in more rural areas in the last few months. 

The area this house is in is declining I feel, based on the types of applicants I get. I get a ton of applicants but few qualify credit or income wise. Lot's of qualified ones who say they will apply don't. 

I'm left with the choice of holding through the summer renting season or selling it and 1031 exchanging to another house or two. Trouble is, my interest rate on this house is 3.625%. I'm looking at 7-8% rates to buy one or two more rentals as replacements...and they will bleed money even when rented out.

So hold or sell? Right now reading my own thoughts here, it seems like selling and replacing with other properties will lose even more money and I'm better off just holding.