Check with the municipality about the limitations of home businesses. I'd say as long as there isn't a stream of cars in and out all day that as long as you are within the guidelines for a home based part time business then the only thing to worry about would be compressor noise. That's easily solved with something like a California air tools compressor. They are designed to run very quietly.
There are no covenants that I have ever heard of that pertain to what goes on inside your residence. As long as the garage door is down you are inside...