I would go tankless. I had one before and loved it and it was gas. In our current home I will replace the current tank with tankless when the time comes. I would consider also installing a curculator so you arent waiting for the hot water. Is there a possibility that this would eventually replace the water heater to supply the rest of the house? Tankless heaters last 20+ years so if yes, I would consider going bigger and plan for it.

@Emily R.

You didn't mention whether your current water heater is gas or electric. Either way, replacing a tank unit with tankless isn't a simple swap-it-in scenario.

Gas tankless are upwards to 200,000 BTU heating capacity which may require a larger gas supply line, and in some cases the main feed line into the house may need updating.

Electric units pull up to 120 amps vs. a tank unit being 30 to 40 amps.

Although, you may not need a tankless of that much heating capacity for a unit that handles only your kitchen (not laundry?) and one seldom-used bathroom. First step is determine the required capacity, then determine what other updates may be necessary.

OP's name shows up as eminaptos in one view and if that's Aptos in the Monterey Bay area, absent having a water softener installed, it's an area of hard water. A tankless water heater is probably not a good idea.

Also, if Aptos, she like me has high electricity rates from PG+E. Gas is no bargain either but heating water with gas is cheaper than with electricity in any form, a hybrid heat pump or otherwise.

@Elmer J Fudd -- We *do* have a house in Aptos, but this is for our house on the Peninsula that we just bought. I think our water is pretty hard here, too, though, since I'm seeing deposits in our kettle. :/ (Never noticed it before at the house we rented a mile away, so maybe it's these pipes??)

We currently have two gas water heaters. The leaky one supplies the kitchen, the objectionable shower :P, and the washing machine -- I'd forgotten about that, and I use it at least 10 times/week. So that bumps up capacity significantly.

It's sounding like tankless might not be an economically wise swap. :( But I'll still ask the home warranty people what they cover.

If you have Hetch Hetchy-sourced water, it shouldn't be hard. But kettles don't lie. Call your water supplier, they have the stats of test results.

In hard water areas, tankless models should have periodic "maintenance", basically a chemical de-scaling of deposits inside. If there's a handy or otherwise inclined person in your household, if the water pipe install is plumbed properly, it can be done without calling a plumber. Otherwise, assume at least biannual service visits to keep it operating well.

A first time install of a tankless model where a tank once lived can require the install of a larger gas pipe running from the gas meter to supply it. Another cost to consider.

I've recently replaced one of the two tank heaters in my primary house. What was there lasted for 18 years (I know, I've been in the house 25 years) - it wasn't leaking but I wanted to act before it did. I didn't consider a tankless model, that's just me. Easiest and cheapest to replace like with like.

It was you who did so. I first clarified where the person is located and as I am in the same area with the same utility and utility rates, I think I offered a better informed view. In this region, for homes that have natural gas service (and most all do except those in remote locations), electric water heaters are rare and for good reason.

I went from a (pretty large) tank heater to a tankless when it died after 15 years. Eh, not a fan. It was expensive (we already had gas so didn’t have to do anything there), has funky habits and you have to flush it every year ($300ish). I’m going back to a regular tank heater in my new build. My water bill maybe saw $5 difference in savings. Nothing to write home about and I don’t care to have to do maintenance.

Replaced it with the same type of gas water heater. Home warranty won't pay for a tankless (three to four times the cost - $3000-$4000) and you have all the additional plumbing, venting, and maybe electric. Plus the delay in getting hot water to the shower is just the same unless you have a water recirculation system (another $2000).

At the end of the day, though, it's your choice.

@sktn77a Thank you! I know they won't pay for a tankless, but I think *maybe* they'd give me cash instead of a replacement (that was on offer for our furnace that went out) (argh) -- so it would offset the cost of installing tankless. I'm still not convinced it will be worth it, though.

sktn, I think the dollars you mention may be just for the appliance itself in your area?

We're in a high cost of living area. A friend just replaced a 60 gal tank unit in a neighborhood "on the Peninsula" (near where EmilyR says she lives) and it was $3000 including labor. I'm not citing that as necessarily indicative. My 40 gal tank, installed by a busy and highly rated plumbing contractor a few months ago, was $2000. I think part of the difference in price was that his was leaking and it was an "emergency" call while mine wasn't and was scheduled a week in advance. Both Bradford White conventional units.

A tankless hot water heater is great is you have a continuous hot water demand. If you don't have a big demand then the small savings per month is not worth the big upfront cost. If you have two hot water heaters then I would think a 40 gallon tank with a 40,000 BTU would be fine. You should be good for about 15 years.

We replaced our tank w/tankless 2 yrs ago and are super happy - have a reputable plumber look and give you a quote - you may only need 1 tankless for the whole house( that’s what we did) - we can literally have 2 showers, the laundry and dishwasher running and not having that bulky thing freed up a ton of space in the laundry room for a counter and sink. Not going back for sure!