where did you come up with 7 years loss?

I used an online calculator. For 2, only the 1st year is small negative, actually offset by tax savings. That is if consider tax savings on depreciation, etc. it should at least break even.

If consider 4% inflation (rent increase too), 5% property appreciation, it will be positive after 1st year even without tax consideration.

This is the calculator I used:
http://www.goodmortgage.com/calc_investment_property.htm