Where I live you need to have a certificate of occupancy for a fee (usually the renter pays that) so you have to make sure the area you are renting out complies with all the safety compliance issues beforehand (smoke and carbon monoxide detectors come to mind). And yes, at least where I live rental income is taxable.
Most definitely have a written lease. I'm sure there must be sample leases on line for your state. Also factor in utilities in the cost.
Then there are little things, like will you allow them to paint or not, pets, will you allow overnight visitors, quiet time hours specified, if you have a yard, will they be allowed to use it, etc. lots and lots to consider. Also, you'll be giving up some of your privacy...that is something to think about as well.
Like others suggested, a background check, recent references from where they rented before, a thorough credit check, place of employment....the list goes on and on of things for you to consider.