There are at least ten issues and questions you need to deal with, besides the five you have raised. Even the questions you did ask do not have simple yes-or-no answers. There are pros and cons for each one.
A day care center has all kinds of impacts on your property and your neighbors. The use and the wear-and-tear on your property are much more intense. You should be paid compensation for that cost to you. The provisions of your lease or rental agreement regarding maintenance, repairs and replacements, inspections by the landlord, and insurance, need to cover this special use.
This is a use that belongs in a commercial space, not a home. Your tenant wants to do it in your house, because rents for single family homes for residential use are substantially lower than commercial rents. But the reason commercial rents are higher is, in part, because of the more intense use and the greater likelihood of third-party claims for personal injury and damage to their property. You're going to have all those expenses and risks, and your rent should compensate you for them.
You need to sit down with an attorney and go over all the circumstances.
Dana Sack
Answered on Jul 03rd, 2016 at 3:02 PM