Homeowner wanting to rent out 2nd bedroom for short term stays

Hi, I own a 2 bedroom and am figuring out how to make use of the extra room and still maintain my privacy. The only idea I've come up with renting the 2nd bedroom out for short term stays 2 to 3 months.

1. What do I need to be aware of before doing this?

2. What paperwork do I need to process on the person other than background checks, credit history and having a strong renters agreement?

3. Anyone done this and have experiences to share.

Any ideas on what to do with the 2nd bedroom would also be great!