Rent out or sell a mortgaged house?

In these hard times we have no choice but to move in order to find work. Our dilemma is whether to rent or sell the home we bought with a mortgage 3 years ago. On our street I would say 1 out of 20 is for sale, and half of those have been for sale for a year or more with most prices as reasonable as we bought our... show more In these hard times we have no choice but to move in order to find work. Our dilemma is whether to rent or sell the home we bought with a mortgage 3 years ago. On our street I would say 1 out of 20 is for sale, and half of those have been for sale for a year or more with most prices as reasonable as we bought our house for. We have added air conditioning to our house since we bought it and fenced in the backyard.
If we sell, in order to sell fast (because we won't be able to do rent AND a mortgage for very long), I'm guessing we'll need to drop at least $20k off the price we bought the house for, and the real estate fees will be around $5k. Can we refinance that loss into a smaller mortgage when the house is sold? In addition we will have a $900 mortgage payment to make every month until the house is sold.
If we rent it out, assuming yearly maintenance will be minimal, and we can rent the house for somewhere around $800, then after subtracting the mortgage payment we are losing only $100 a month?
To me it makes more sense even with the small loss and the hassle of managing the rental, to rent out and take a small monthly loss until the market improves than to sell and take a loss of ~$35k. Even if we are paying a fee to a managing company to rent, it would still take a decade to lose as much money as selling..
Update: @Dudley
sorry if it wasn't clear; we definitely won't be risking another mortgage for a while.
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