Effective House Hack? In-Law Suite for Cashflow on Owner Occupy

[Bleu T.]

The property my family is currently occupying is a completely rehabbed 70's single story on a nice city lot. (I completed all the work)

I've been managing another investment single family home for awhile now, so I know what it's like to be a landlord.

I'm saving cash for my next realestate move, and this idea of an attached in-law suite keeps returning. I have room on my lot, with parking.

Who's done this?  Is this a good use of my cash and home equity, or is it better to invest in another property? 

I believe I could get between $700 and $1000 for a small unit as a long term rental. Bend OR is a relatively expensive housing market with low vacancy rates and low cap rates.

What do you think?