I know people who have done it. It actually works quite well because you're right there. You know if they are having wild parties and tearing the place up. You can take your plunger over there instead of having them call a plumber you have to pay for. You can see if they're trying to move out in the middle of the night and stiff you.
I lived next door (house, not in a duplex) to my last landlord and it seriously was the best. The only downside would be if they expect you to do everything imaginable like change a lightbulb, but if they are paying rent on time and everything else is OK, it might even be worth changing a lightbulb here and there
