Renting out "In-law" Units - Pros & Cons

[Moises Correa]

I am looking to invest in the Chicago market, and was initially considering only 3-flats for my first house-hack (I will live in one unit of the building). Many buildings in the city are set up as legal 2-flats with a non-conforming garden unit in the basement that can proxy as a third unit. In some cases, I've seen these units fixed up very well with decent windows and ceiling heights. Does anyone have experience in investing in these 2-flat + non-conforming unit properties? 

Specifically, either (i) using the non-conforming unit as your primary residence, or (ii) renting out the non-conforming unit to a tenant? What are pros and cons to renting out the non-conforming unit?