I also had a passive loss for the rental property in 2017.

BEST DECISION I EVER DID WAS MAKE MY WIFE MY BUSINESS PARTNER THIS YEAR FELT LIKE NEW BEGINNINGS LEAVING A OLD PARTNERSHIP AND STARTING A NEW ONE LITTLE  DID WE KNOW THIS FLIP WOULD BE THE WORSE THING WE DID THIS YEAR TALK ABOUT A HOUSE THAT WOULDN'T STOP SPITTING OUT PROBLEMS FROM SQUATTERS BREAKING IN , FROM THE CITY CONSTANTLY GIVING VIOLATIONS, WE EVENTUALLY TOOK A LOSS OVER 50K OUCH!!  

Mid-term is more likely to work in any market than STR, but I think you would be surprised at how well an STR could do if there are no other options like that in the area (think people's parents or friends coming in for the week(end)).I've seen a lot of people grimacing at the net-negative house hack (it's just a product of rates and low inventory in a lot of markets) and this is one option to try to recoup some of that loss.

If the rent payment covers your mortgage and you have a good tenant, why would you get rid of them to take on the expense of unit turnover, because you will have to do one, and the 5% vacancy loss just to increase your rent $150 per month?

When you add up legal fees, lease fees, loss of rent, etc. it can add up.

With the potential for a small financial loss on your end, litigation would certainly not be worth the hassle and expense.

We sold it at a substantial loss, but at least recouped some money.Analog:I did get a lawyer, but he finally decided it was too expensive to sue a company that does business in a different state.

Very large out-of-pocket medical expenses are also part of this game.Balance gains and losses on your investments.

If there is no initial agreed-upon amount, determining a fair compensation becomes more time-consuming, leading to further losses.

Just take the loss and repurpose the downpayment capital into something better.