Please share resources if you know some.
Is it even legal and how can you protect yourself and prove your transfers? Have you seen any such service or infrastructure?
If it did exist, would some of you users/holders/miners consider paying for rent or even the utilities in cryptocurrency?
Is bitcoin the right currency to use in such a service or are there obviously better ones? (less volatility/more open/public / ...)
First of all, bitcoin is a currency and it has value. So if both parties are agreed on bitcoin payment, then for sure there is no issue in doing a transaction in bitcoin.
In most countries, including mine, it is not legal to do transactions in bitcoin, so in my case, if i still do transactions in bitcoin and any mishap happens, in terms of house, or apartment ownership, I cannot take my case in a court of law.
So you need to consider the legal aspect of this matter also as when the rent is paid in bitcoin, the government may demand taxes on rent received, and then they found that all is being done through bitcoin, so if you are not sure about things, better hire a legal person to guide you.