We replaced the aging water heaters in our home just over a year ago. The plumbers working on the job were very keen on Rinnai, so I spent a lot of time reading up on performance, cost, etc. Bottom line: with luck, you might break even, i.e. get the same performance for the same cost, after about 15 years. But most people think that overall tankless systems are still too expensive, and the costs remain higher than traditional tanked systems even if the tankless heaters work exactly as advertised. The main advantage is if you have a high demand for hot water at specific times. So if you have a houseful of guests who all take showers at 7am, tankless ensures you don't run out and have to wait. Friends of ours installed tankless water system for just this reason. Note that with tankless, you can sometimes wait for a couple of minutes for hot water to reach your faucet or shower. Our friends installed a small electric water heater to avoid this. We went with conventional water heaters this time around. In 10 years things may be different. Cheryl

The units wisehvac is referring to are AO Smith Vertex. Link below. They advertise 90% or 96% thermal efficiency depending upon the unit. However, that's misleading because it has to do only with heat-transfer to the water. They don't talk about heat LOSS from standing hot water in the tank which, I think doubtless, would be substantial. There are two major drawbacks. 1) They are expensive. $1,500 and $2,000 plus installation and 2) They are still tanks. Tanks are cursed with a reputation for failure via fracturing and leaking typically at around 10 years or so. Vertex has six year guarantee....interestingly no longer than other higher-quality tanks. They haven't been around long enough to say whether they are any longer lasting than other tanks. They are designed for easy retro-fit. Tankless units are typically very long-lasting and, of course, don't have heat loss issues like tanks. They must be sized properly and installation can be relatively easy or a really difficult depending upon location. Considerations of gas-line supply and exhaust configuration can be make/break issues. IMHO, either alternative should be handled by a professional installer with substantial experience. In the past, everything was just gas-supply plus flu/exhaust and you're done. There are MANY more considerations with units such as these. Here is a link that might be useful: highest efficiency water heaters

Hi Mollie, Yes, putting a tankless hot water heater under house would work very well. Folks here in the SE around Charlotte NC area put the tankless water heaters in their horse and cattle barns. The tankless water heaters are wonderful and handy just about anywhere.

I know that a lot of people in my neighborhood have water heaters in their attics with no drain whatsoever. Not a good situation. Ours is in the garage, and drains into the garage floor if it leaks. For annual flushing, we connect a garden hose and run it out into the yard. I think you will get more mileage on this question if you move it to the plumbing forum. Good luck.