STR Losing Money - Sell at Loss or Hold?

[Jacob Berl]

I'm a novice investor and purchased a short-term rental property in a pandemic boom town in 2022 that is losing money and I'm debating to sell it for a loss, or holding onto it while continuing to accrue negative cash flow. The property was purchased for 710K, and we could sell it now for approximately 625K since our local market has gone down post-pandemic. I don't anticipate it will appreciate back to the 710K sale price for the foreseeable future. We have a good interest rate (4.25%) and a remaining loan of 450K on the property (we put 250K down). With our current rental income, that we don't expect to increase anytime soon, we are at an annual cash flow of about $-11,000 after mortgage, taxes, insurance, expenses, maintenance, etc. are all covered. We are wondering if it would be better to just off-load the property now at a ~85K loss, or hold onto the property while accruing large annual deficits in hopes that the property will appreciate back to our purchase price in the future. We do have the ability to financially withstand the annual negative cashflow for this property with positive (~18K) annual cashflow from a second (more profitable) rental property - but are wondering if we should just cut ties, or continue to take good money and put it into bad. Any help or advice would be greatly appreciated! Thanks!