Carry a small balance and pay the minimum bill plus a little extra each month.

The short answer is yes, all your deductible expenses borne from depreciation can be carried forward indefinitely until you either sell the property or until you start earning net income on the property. 

I would only want to consider taking a loan of that size however if I was CERTAIN any investment would generate enough income to cover the carrying costs.

I don't call carrying these types of loans for no reason 'asset protection' at all. 

Personally I would not carry the higher risks of renting a SFH, especially now, and I would be selling to invest in multi units...each to their own.

I would ask for actual numbers (gross revenue/net revenue) and see if it makes financial sense for you.You'll need insurance that covers vacation rentals which most carry now - just ask your current provider if they do or don't.Other costs:Registering the rental for the short-term license, Florida sales tax, and all county taxes.Will you be self-managing or hiring a manager?

Your insurance carrier may also want it.If it were me, and I could afford to carry the property vacant, I'd move the tenants out and rehab the whole place at once. 

They will appreciate you 10 times more in the end and you won't carry a scarlet letter for years with the OTAs

Maybe eve a guy that carries used appliances for swapping out. 

Would they carry over to the next year?