The Best Place To Install A Tankless Water Heater In Your Home

If you're ready to replace your existing conventional water heater with a tankless water heater, you're probably wondering where you should install it. One of the great things about tankless heaters is that they are significantly smaller than traditional water heaters, which means you have a larger choice of installation options. Here are a few things to consider when deciding where to install a new tankless water heater in your house:

Ventilation And Fuel

The first step in determining the best place to install a tankless water heater is to consider the fuel type your heater uses. The different types of fuel sources include:

  • Electricity

  • Natural gas

  • Propane

If you are going to install a propane- or gas-filled water heater in your house, then it needs to be placed near the propane or gas supply. The heater also needs to be near the electrical supply. You can always install an electrical outlet if there isn't one nearby. Since propane and gas are dangerous and produce toxic exhaust gases, you also need to put the tankless heater in a place where it can be vented outside. Your best bet is to install the heater on an exterior wall of your home instead of an interior wall. This will reduce the complexity of the heater's venting system, and it will minimize installation and material costs.  

If you have an electric tankless water heater, you have more location options. It doesn't need to be located near a gas or propane supply line, and it doesn't need to be ventilated to the outside. The only requirement is that the heater is placed in a location where it can be plugged into your home's electricity supply.

Water Leaks

Since your water heater is connected to your water supply, leaks are a big concern. If the tankless heater fails, or any connections between the water supply, the heater, and the faucets fail, then you can expect water leaks of various degrees. When contemplating where to install your new water heater, make sure you don't chose a place where water leaks will cause serious damage to the structure of your house, or anything else in the vicinity of the heater. Put a drain pan under the heater to reduce the risk of water damage. You can purchase these inexpensive pans from your local home improvement center.


Before you install your new tankless water heater, read the manufacturer's instructions carefully and thoroughly. Most heaters must be installed a certain distance away from combustible materials, walls, and other structures. When looking for the best place to install your water heater, also make sure you put it in a place where you can easily access it for maintenance and repair purposes.


Since a tankless hot water heater is significantly smaller than a conventional hot water tank, you can install it just about anywhere. When looking for the best location for your tankless water heater, consider mounting it in a closet, crawl space, attic, or other obscure location. Some tankless water heaters can even be installed outside your home on an exterior wall. If your tankless water heater is electric, you should still keep in inside, unless you are going to enclose it to protect it from the elements.

Replacing your conventional hot water heater with an Energy Star qualified tankless hot water heater can save an average family $100 or more a year. This savings alone makes it worth it to install a tankless hot water heater in your home. Some handy DIY homeowners could install this type of water heater on their own. Or, you can hire a local water heater repair and installation tech to come out and do it for you.