You only have 2 options. One is to renovate and the other is to move. (Assuming that continuing to live in your old 70's-style (?) abode is not an option.)

Just spend a lot of time thinking about the realtor's fee (6%), were you to move, not to mention the premium you would pay for moving into a house that has already been renovated. That should make the cost of the rental easier to bear.

My need is: Help me to convince my wife that it would be better to do a major renovation (rental costs included) than it would be to move. The rental is "throwing away" $30,000 or so. The moving is "throwing away" a few hundred thousand, the way I look at it.