This is a straight math problem and it depends on what you can rent it for. If you are taking a monthly loss on your rental then you need to calculate what that loss means in terms of opportunity cost. If for example you're losing $300 per month then if that $300 was invested instead in your retirement plan what would it yield? You would be in a position to take depreciation on the property and that could be a benefit.
The current thinking by experts that I follow is that the local market could give up another 6-10% this year, flatten next year and then we slowly crawl out of this trough at a low single digit rate (locally anyway). If that is the case then apply this to your home.
If it's $350 now and loses 6% more then its $329 next winter, $338 the year after that, $349 the following year and so on.
So as much as this is a real estate question it is really a financial planning question, and it is a math problem. So find out what you could get for rent in the area first. Apply it against what you'll pay. Calculate your depreciation benefit which is 27.5 years straight line on the improvements (building assessed value percentage vs land). Figure on conservative rebound numbers like I've mentioned above. Now see if it makes sense.
Its true none of us has a crystal ball but there is no black magic in this equation. Call a competent accountant, fee only financial planner, or an broker who has an investment property background that can answer these questions - because that is what you're talking about turning this into, an investment.... more