My house was built in 1993.  Last year I replaces the furnace and AC, and replaced the roof.  The only other major mechanical piece is the gas water heater.   It's not in need of replacing yet, but wiser men have suggested swap it out for $300 before it leaks and costs much more $$$$.  What are your thoughts on tankless systems compared to traditional?  I've seen some reviews on Lowes or Amazon and folks complain about longevity.  The house is 1.5 baths, and it's just me and the wife.  Is there any real benefit to upgrading to a tankless in a house that doesn't drain the heater very often?   There is room in the space that I could possibly get a larger tank.  Since my dad has passed, it's not likely that it will be a true DIY job, at least not by me.  

If what you have isn't broken don't fix it.
Wait until it needs to be replaced. What's wrong with your current one? Not keeping up? Leaking?

Nothing really wrong other than it being 23 years old.  It's in a utility closet on the back of the house, so if it does start leaking, it could be bad before it gets discovered.

I'm thinking more of preempting a major problem, even if that means just replacing it with another traditional heater.

We had changed to an electric water heater back 16 years ago when natural gas was deregulated well got to thinking we needed new elements in it back during the summer and decided to go tankless well just me and the wife here in the house and it was the best decision we've made gas bill barley has went up and electric bill went down a lot

Do you have hard water?  Is so, do you have a water softener?  If you don't have soft water then a tankless is not a good idea.  

Your water heater is on it's last legs.  Start planning its replacement.  It's already lasted well beyond it's design age.

Also, putting a tankless in is usually not as simple as just installing it.  You likely have to upgrade the vent to a larger one and run a larger gas line because the tankless water heaters use a HUGE amount of gas while they are running.

This.  Also, location of your current water heater matters.  If external, you need to make sure to construct a element shielding contraption for your pre-filter device.  My plumber never told me and I was stupid for not reading the manual:  filter can not be exposed to direct sun.  Those UV lights + heat/cold expansion will gradually kill the plastic housing.  Mine cracked at the 1.5 year mark, twice.  

So if your current water heater is in a good location, just replace it with a good quality tanked one.  Much less hassle.  Peace of mind is priceless.

I've been told that, other than new construction, tankless water heater most likely will not give a return on investment. Since your existing water heater is in an out of the way location and quite old, take a close look to see if you have proper protection from a leak. Do you have a drip pan underneath that is up to current code? If not, I would seriously consider getting one put in place or just replace the whole thing and bring it up to code. If you're concerned about efficiency, might want to look into insulating all of your hot water lines to conserve some energy. In many cases, that's a DIY project if you do it right.

My mothers gas water heater was installed when JFK was still banging Monroe.   Seriously - and no problems.

I'm not sure if that thing is all chrome or what - not a spec or rust on it.

The ting you need to pay attention to with a tankless is the flow rate vs temperature increase chart.

Everyone I know who has installed one now has 3. They will only increase temperature so much when water is flowing through them. So in winter when you have a 40 degree input temp one will not be able to increases to what you want if say you have a shower anda. Sink running.

Since they are on demand they typically either put 3-4 inline with each other.

My house is all electric. I installed a hybri heat pump unit last year. My electric company had a 500 dollar rebate and with tax incentives it will pay for itself in 2 years. Saves me 50 bucks a month. And with the rebate was the same cost as a normal heater

Thanks for the tips.  I don't have hard water, it is actually softer than I thought it would be.  The utility closet is enclosed and houses the furnace as well as the breaker panel.  It just has an exterior access.  I don't know anyone personally that has a tankless, so just reading reviews is all I can do to get user insight.    I'll probably just go with a traditional one.  I guess insulating the tank would help the efficiency as well.

Don't wrap the tank if you install a new one.  No reason to and it might cause problems.  New water heaters have MUCH more insulation than old water heaters and just don't lose much to standby losses.

10-4

Gas is cheap compared to electricity.  There is also a lot of energy used keeping the water hot in a tank system.  A tankless system heats it as you go.  Takes a minute to heat but it is worth the cost savings long term.

With natural gas it's unlikely that a tankless will pay for itself over the life of the unit and there will be more maintenance with the tankless if you don't have a softener.

Tankless benefit is that it never runs out of hot water as long as you don't exceed the rated GPM draw. The negative can be....you use more hot water....which negates the benefit of no standby losses. The newest tank heaters have very little standby loses.

Do you have a large Jacuzzi type bath tub?
Do you have lots of daughters that take long showers?

If not I see no reason for a tankless water heater.  I've installed a couple dozen of them and those are the usual reasons.  If you insist on getting a tankless look into the Navien units.

Were on our second one (we moved).  I wouldn't have anything else.

at our old house, we replaced an electric tank with a propane tankless and our electric bill went down $50/mo.  There's 6 of us here, so endless hot water makes showers go a lot faster.

My .02,

Just like everything, they have their pro's and cons.

In colder climates, where the incoming water is colder(duh), the gallons per minute that the unit can heat, to a said temperature rise, is the toughest part.

Here, in WI, if the incoming water is 50 degrees, and you have it set to 120, your looking at a 70 degree temp rise.

The largest Rinnai commercial unit will provide 8 GPM with only a 50 degree TR, and thats burning 237,000 btu! (a std. home tank water heater burns 34-40,000 btu).

The largest Bosch unit I've seen would be around 6 GPM, with 199,000 btu and a 50 degree TR.

The best electric units I've seen are more in the neighborhood of 4-5 GPM with a 50 degree temp rise, and it uses 150 amps to do it, so a 300 amp service min., would be needed.

To put that into perspective, the valve for tub filling should flow from 12-18 GPM, shower heads run at around 2.5 GPM(if you dont pull out the restrictors), faucet aerators around 2 GPM, laundry WM 2-8 GPM.

Gas units will almost always need new gas lines run to them, many times, all the way from the meter, and I've had a few times where a new, high pressure(2psi) gas meter was needed. And venting is also many times heavier duty,
because while they save a good bit of money by not maintaining a tank of water all day, when they are running, they are not super efficient at all, the exhaust is very hot.

On installation, unless you are blessed to live in an area with completely soft water, make sure to have a valve arrangement installed so you can easily de-scale it, by hooking a pump up, and flushing a solution through it,
to remove the build up of mineral that naturally precipitates out of the water when it is heated.

Front load washing machines, and many HE washers add small amounts hot water, then tumble, then more hot water, causing the heater to cycle on and off, many times never reaching the set temp, sending essentially thermal morse code through the hot water pipes.

A new issue we're seeing is some of the really low flow faucets and shower heads wont flow enough to trigger them to run.

I have installed many of them, and most of the people I have put them in for, still like them. Almost all have mentioned "getting used to them", meaning not having multiple hot faucets running at the same time.

Personally, I will stay with my tank heater, as I have 3 daughters, and my wife.

That's the kind of insight I am looking for.  My water heater is gas already, and since i installed the most efficient furnace last year, and my wife has hot flashes so temperasure in the house stay 69 degrees, my gas bill has probably gone down already.  I'll just replace it with a new tank when I'm ready.

Thanks for the shared wisdom.

Yup, depends where you live.

Round here, the water comes out of the ground pipe at about 35 degrees (or lower) in some winters. (Water mains regularly freeze around here.)

For a tankless to keep up with that, you need TWO inline or more.

So it depends on where you live.  Very few tankless around here at all as the result of that.