My wife and I have two cameras, one interior and one exterior, at our Cocoa Beach FL vacation condo. Although we refuse to rent it out, we do invite family members to use it, and they have done so.
A Panasonic wi-fi PTZ camera is overtly installed about 10' up on the living room wall. Its home position is set to view down the hallway to the foyer and front door -- the only access to the residence. However, the camera is capable of panning/tilting to view most of the living room (including sliding glass doors to the balcony) and into much of the dining area. It cannot view into any part of the bedrooms or bathrooms. There is no need to walk through the hallways to reach a bathroom from any bedroom -- they are en-suite.
Because it is 1000 miles away from our principal residence and jobs, my wife and I are able to be at our condo only 4-5 days a month at most, and guests use it an additional few weeks a year. The condo HOA has the right to enter the unit at any time, and maintenance personnel do need access approximately every other month (HVAC, pest spraying, etc). Typically, the HOA wants a hard key, but they have tested and accepted a tag that goes in the locked key rack, giving the entry code for the Schlage lock keypads (latch and deadbolt) and alarm keypad. I occasionally set up a temporary access code for a delivery or other occasional access need. The Schlage locks send a message to my mobile phone indicating that someone has entered, and using the phone and the Vera website, I can then monitor the activity on the interior camera.
How do guests react to the interior camera? At first, there were some questions and joking. To put people at ease, we did several things:
(1) The camera is in full view, and has an LED indicator to show when it is being accessed/transmitting. Additionally, Vera is set to turn on room lights when the camera is accessed;
(2) I installed the camera on a wall on/off switch to control its line power. Guests can turn ithe camera power off, althouh we do ask that it be turned on again as they leave;
(3) I also have shown them how to unplug the camera power supply. So far, nobody has felt the need to do that;
(4) I give family members the URL and password for the camera, so they can watch it from their homes and be more comfortable with it; and
(5) the condo's computer has a guest password and the browser is bookmarked with the camera's access, so that guests can watch the camera and verify that it indeed goes off when they turn the wall switch off.
Now, the interior camera doesn't seem to be an issue, although I realize we are only dealing with family members who are not paying to use the condo. Even when my wife and I are there ourselves, we don't bother to turn off the camera, although I admit to occasionally looking over to see if the access LED is on.
The exterior camera is a wi-fi PTZ dome camera that can scan the beach, the nearby cruise port, several of the launch pads at the Kennedy Space Center, and our building's underground garage entrance. It is mounted in place of a ceiling fixture on one of the balconies, and thus also has a wall switch on/off control. We just watched the recording of the arrival of the new "Disney Dream" cruise ship sailing into the port. The exterior camera has never been an issue with our family guests, and they enjoy remotely watching events like missile launches.
Finally, I am not aware of any legal restriction on interior cameras on one's private premises, provided that the camera is discllosed, appropriately positioned, and any audio is disabled. Many state statutes prohibit undisclosed audio evesdropping but allow video viewing, given proper respect for personal privacy. Even in public or semi-public places, such as offices, hotels, and malls, even covert cameras have been allowed by the courts (excepting guestrooms, restrooms and dressing rooms).
