My in-laws have several rentals around town. It works for them since FIL is very handy and almost never requires professional assistance (and he likes doing that kind of stuff). Like others have said rentals come down to "Tenants and Toilets". In-laws try to screen tenants, but still have had to evict a few over the years.
Your situation might have an upside in reducing stress on the fellow who works for you, who knows might be a better employee.
It might come across as "The Company Store", but you probably have to watch that it does not look like a cushy deal for a favorite employee as well. I say your both adults and as long as everybody goes into it with their eyes open, the i's dotted and t's crossed it might be a win-win for both sides.
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