You want to do a few things with locating your heater: 1. locate it so that it can be vented in an approved way (you can't locate the vent too close to windows, doors, etc.) 2. Locate it so that the vent run is short as possible (a few feet is good) if that's not possible, consider a condensing unit that vents with PVC. Stainless Steel venting is VERY expensive. A condensing unit adds several hundred dollars but can be cheaper than a long run of SS vent 3. Locate the heater close to where the water is being used. I was able to locate my heater 20' closer to the bathroom than it was. You can't vent the tankless through an existing flue and you sure can't vent it into a shed. Why can't you vent it to the sidewall? How close is the neighbor's house? You want to mount the unit inside unless you have really mild winters. For mild winter areas they have external installed units. Both interior and exterior have freeze protection, but that should be a fallback protection system. Here is a link that might be useful: See Pg 12 for venting locations

Thanks for the info. Can we have an old style gas water heater (in the attic) AND tankless water heater downstairs servicing the same house and gradually phasing out the fixtures (room by room) with end result of eliminating the old gas water heater after remodel complete? This post has helped me realize that my main desire is to try to do this in phases rather than one job (which I'm sure would be cheaper.) For one reason, the smaller jobs help us evaluate the contractor and decide whether we want to continue using him (he gets to evauate too). It also helps us keep from having so many "change orders" before job is done as we learn more about our 77 year old house. (think I will cross post this in the "old house" forum as well) background: I think we are committed to going forward because we LOVE our neighborhood but neighboring homes are old like ours so besides prices being quite high though footprints are small (in center of major metro area), we are afraid we would buy another old home that was in worse shape than ours and would still need to do work.

The reason that the manufactures are a bit vague on answering your question is because there really is no finite answer. In order to get a finite answer you would need to check your local building code because the regulations can change dramatically from one code to another. First your code will define whether you need standard single wall or double wall B-vent pipe. Typically you may have a horizontal run providing the pipe is pitched at 1/4" per foot upwards toward the stack. You local code will limit the length of the horizontal run. Some will allow the horizontal run to be equal to or not more than the length of the vertical rise while other codes may reduce that to 60% or 75% of the vertical run. Understanding that the vertical riser may be hot and could present a risk of injury to people on the deck some codes will not permit the riser to be within 8" to 10" horizontal of a deck surface. The horizontal pipe must connect to the vertical stack by means of a Tee into the side of the stack and the bottom of the stack must be open to permit air to enter the stack from the bottom. The top of the stack must be a minimum of 2' above the roof of the structure and in regions subject to snow they may require the top to be 2' above the average snowfall depth. In addition to the normal clearances from vertical surfaces, windows and doors most codes also require a minimum height above a surface used as a deck or walkway.

Hi David, Often venting can happen through the rim joist (so between floor joists) which is generally above grade. Your layout may not allow for that though. As far as I'm aware, venting the heater using PVC should be fine exiting below grade (assuming it's a condensing unit designed to vent through PVC). I'm not sure how to do that with the dryer vent though. PVC is not approved for dryer vents and metal vent underground is really a bad idea. Since you have a basement - do consider an electric hybrid water heater instead. They are similar or less to operate and much cheaper to install.