Its perfectly legitimate to deduct valid costs from the tenants deposit.  

Go ahead and mention it - although it doesn't affect the validity of your contract in any way

In the winter on an average winter the gas for the pvc vented newer furnace is about $100 for the highest month and about half that for months either side of that. 

Just wanted to add that gas and water both have the added bonus of being able to establish a landlord account where you set it up to automatically revert to you at tenant's turnover, saving both the hassle and the new hook-up fees in between tenants.  

Does anybody have any recommendations on what I should use to replace this gas space heater?  

Owner pays for Gas, Electric and Water.Monthly Income: $1,630Expenses: ?

On the extreme I can say:  don't own lagoons or private septic systems, wells are risky and work, never own the wires and poles, same for never NEVER own gas pipes.That should give you a "flavor" of the range of fun you are in for.  

Validate rent for the area using Zillow, and calling at least 3 property managers in the area4.

I'm an engineer by profession and I've worked internationally in the Oil & Gas industry for the past 4 years.  

You have to have a valid reason to evict (non-payment of rent, etc.)