It would depend on your state law AND your wishes.  There are insurance issues (which I think that you recognize) and you want to make sure that his business is insured and you are an additional insured. You also want to make sure your home owners is not voided by the business.  If you do not wish the tenant to do business on your property then a residential lease stating so is what you want. It's a contract.  The terms are negotiable and the price should reflect the risks and liabilities.  Good luck.