It may still be useful, depending on your situation.If it is locked, then qualifying for material participation in 2025 will not unlock this loss.

Cameras, security guard, locks, types of lights?

I just locked up 7 more SF all will have about 15% or better net caps. 

Completely lock/key separate and 0% owner personal use.

The negligence thing has always been interesting to me because it seems so subjective...Gross negligence seems a more straight forward - rare to no inspections, known issues, complete ignorance of potential issues/lack of due diligence (ie: fence around pool w/ locked gate) etc.

It will be triggered upon sale OR refinance, so if you think you might want to refinance in the next couple of years (or at least have the option), you may want to consider a shorter penalty length. 

Should I pull the trigger or just clean up the  unit as is.

It's a widely held belief that you can mitigate this risk by making a purchase while a rate is known and then if rates go up you are locked in, if they go down and you are able to still qualify, refinance to a lower rate.

For example, if you raised rent by $25 a month that is not likely to trigger them moving but it does help control the gap that could develop between your rent and market rates.Each year you skip widens the gap and makes it harder to close and more likely to trigger a move. $400 is tough to recover in one change without triggering a move.I have learned the hard way that I really should not skip rent increases every year, even if they are small.

@Ly MaCurious if you ever pulled the trigger.