I have 4 of my own, but mine are well behaved and don't bark all the time.

With those considerations, if things were to "hit the fan"I don't want to be in a situation where I would be having to pay two mortgages at one time.My parents are completely financially free.

Plus, guests behave a little better when they know they're sharing a roof with the host. https://airhostsforum.com/ has a lot of wisdom and experience. 

I think what should be important is how well you manage your assets and if you spread you wealth out too much you may have a hard time effectively managing them all.That being said imo as many passive/residual streams as you can have, the better off you will be. Having

I have entertained the idea of buying a multi-family residence (duplex-triplex) but the down side for us would be having to share walls with tenants.

My understanding is that Phoenix has a multi month waiting list and in general tenants behave well because of the wait.  

They needed the big bad landlord authority figure to come in and tell them both to behave like adults or they would be out, and to make them both believe that would be a terrible long-term outcome with bad knock-on consequences.The banging on the doors, the cursing, in PA that would be assault and terroristic threats.

Students will behave like wild animals in a house if you let them.The inspections are part of our 8-10% flat fee that we charge for management.

Do you accept well behaved dogs?

Without making any threats or ultimatums, you may be able to get her to understand that her continued tenancy may depend on how well her kids behave, then actually do something about it.