For your protection, I would attach a invoice and contract that can be collected at the sale of the home.

Do I need an invoice from him or 1099?

Also, get an invoice for everything and have copies of all the work done (permits etc) on your home. 

I personally use QuickBooks invoice payment service, IPN, which only charges 50 cents for a bank to bank transfer, but something like 2.75% for a credit card.Personally, I'm not sure I'd want tenants paying their rent with a credit card.  

They put it into an invoice and send it for a discount request.

. # J Beard Bank new primary 11000 Accounts Receivable Accounts Receivable Unpaid or unapplied customer invoices and credits 11000 11000 Accounts Receivable:11100 Bad Debt Allowance Accounts Receivable Bad Debt 11100 12000 Undeposited Funds Other Current Asset Funds received, but not yet deposited to a bank account 12000 12100 Inventory Asset Other Current Asset Costs of inventory purchased for resale 12100 13000 Insurance Lost Rents Other Current Asset 13000 15000 Furniture and Equipment Fixed Asset Furniture and equipment with useful life exceeding one year 15000 17000 Accumulated Depreciation Fixed Asset Accumulated depreciation on equipment, buildings and improvements 17000 12800 Tenant Deposits Paid Other Asset Deposit paid 12800 20000 Accounts Payable Accounts Payable Unpaid or unapplied vendor bills or credits 20000 24800 Tenant Security Deposits Held Other Current Liability Security deposits held for tenants 24800 30000 Opening Balance Equity Equity Opening balances during setup post to this account.

Keep good records and make sure all invoices are billed correctly and have clear descriptions and locations of all services.

Once you get to several hundred units, no one (client, agent, underwriter, book keeper) wants to just sort invoices, track policy #'s and cut checks several hours a month. 

The detailed invoices give me precise inputs to my repair costs.

If there is a surplus in the account - tenant has paid in more than they have consumed - we offer the choice of a) leaving the funds in the account in anticipation of larger bills (i.e. winter is coming); b) applying the surplus toward the next month's rent; or c) {at the end of the lease only} refunding the surplus to the tenant.If there is a deficit - the tenant's resource consumption exceeded their contributions into the fund - the tenant is invoiced and has until the first of the next month to pay the outstanding balance.Originally we started this offering with our student houses, as I refused to rent with utilities included.