You spent a lot of money in down payment and upgrades. Why? Where you planning on staying there for many many years?

If so, do you see yourself ever coming back to this area? Would you consider retiring and living in this house? If the answers are yes, then I’d consider renting.

OTOH, if you’ll never be back to the area, then take your losses now and sell. If you rent, there are ways to minimize the likelihood of bad tenants: charge a below-market rent, but be super aggressive and picky when checking credit scores and references; only rent to people with high FICO scores, spotless references, etc.