House-hacking, home insurance, and taxes (Dallas, TX)

[Alex Shaw]

Hi, 

I'm still in the learning phase of investing. However, I just bought a house for me and my wife to live in. A friend of ours (close friend - was involved in our wedding) needs a place to stay for somewhere between 3-12 months. He's provably going to give us 500-600 a month to help out with Mortgage, furniture etc. I have a couple questions that I'm not sure where to go in order to get answered:

1) Not sure if to do a signed lease or cash under the table (and have him use a P.O box for his mailing address). I trust the friend and don't think anything would be an issue (although I'm sure people have horror stories about trusting friends)

2a) I'm hoping to not invalidate my home insurance and unsure if having someone stay and pay rent (either above board or cash under table) will screw things up if I have a claim. 

2b) Should I have him take out his own renters insurance in one/both scenarios 

3) What are the tax implications of both signed lease and cash under table?

Thank you for your time and input!

Alex