For instance I've always wanted to have a music recommendation engine/app that instead of using collaborative filtering uses some kind of machine learning or deep learning algorithm(s) to identify lyric sentiment, complexity and melodic/rhythmic patterns to recommend me music based on that (across different genres). It turns out that something that seemed straightforward (I really thought I could tackle this after playing around with tensorflow and machine learning tutorials & MOCS) actually requires a lot of specialized/intimate knowledge about how these algorithms work and the theory behind them, I would need to spend quite some time studying (and understanding) before I can even begin coding this as a side project for instance.
Anyway the thing that stumped me was identifying/creating the "features" for rhythmic & melodic patterns, eventually I realized that I was way out of my league and had to drop it.
Later on I found that someone else was already working on this: http://benanne.github.io/2014/08/05/spotify-cnns.html
The OP's opening sentence asked for a project to make $500-$1000, not ride a hype wave.
The title of the OP's post wasn't "I need a way to make some quick extra cash". Most people I know work on side projects more for learning and career development. I gave an answer based on that prior belief.
Sometimes, hype exists because things are genuinely cool. I feel this is the case for VR and smart tools. On the other hand, I'd be inclined to agree with you about chat bots, for instance.