^ Additionally, HRV has to be on all the time. The models I know of are run off of electricity.
I hear what you are saying about passing off the utility costs to tenants. If a tenant pays for utilities themselves, they will be more cognizant of their personal usage.
However, ,ultimately, it really doesn't matter whether you are passing off your utility costs to your tenant or whether you are paying for them yourself. Tenants look at the total monthly payment, similar to purchasing a car. It is just what overall fits into their budget. If I have an inefficient utility delivery system, it is the landlord who ultimately loses rent and profit (Inefficient utility delivery is usually heat but also can be electricity if you are looking at LED upgrades or water if you are looking at low-flow options). If heating your unit is an average $50 more per annum than your competition, you are throwing away $600 a year that you could have added to your bottom line. If tenants are willing to pay $1,400 for a main floor with utilities, it does not matter if you fixed the utilities at $250 a month and call utilities a "profit centre" or whether you charge $1250 and the tenant holds utilities in their name and pay the true average cost of utilities for the household of $150 / month. In the long run, you will not walk away with more money.
The real money-maker in the rental business is renewals. Long-term tenants. Tenants look at how much they are paying in gross terms and look to the market for a way to beat it. Anyone can oversell a product once. Wow, $100 above market? Incredible! Now, ask them how many months they spent vacant, and if it is more than 4 weeks, I made more money than them per annum by having a $100 lower rent...and since I had a lower rent, I had a better tenant profile to choose from AND it is more likely they will renew next year because they feel like they are getting a deal.
Utility inefficiency = waste. You have to punch the numbers to see if the returns for the higher efficient models make sense. For example, LED's probably don't make sense for a SFH rental because the lights get turned off and on a bunch and that wears out the bulbs. Whereas, if you have an apartment building that requires 24 hour lighting they are much more likely to pay off.
Experienced landlords know to protect themselves when doing fixed-rate utilities. Personally, I prefer fixed rate utilities. But I know that in the long run, it does not make any difference whether I pay the utilities or my tenant does, long term tenants are concerned with the total property rental cost.
