2008 – After 5 years your loss on monthly carrying costs is about 42K. But you still have the 70K loss as well as any additional loss/gain in value over the next 5 years. (I’m guessing another 15% loss or about another 30K).
So, you can either take a guaranteed 70K hit now, or gamble and take a 70K +/- any additional depreciation, plus another 42K loss (plus about 28 K reduction in taxes) over 5 years.
I think this is a bad 5-year bet. If you are likely to sell in 5 years, then you ought to sell now. If you plan to hold for 10 years or more, however, it would probably work out OK.
Also, if you have sufficient assets (e.g. 70K) to sell now and pay the loss, then you probably could also handle the risk of carrying this as a rental.
