Thinking about upgrading to a tankless water heater? These compact systems can deliver endless hot water and lower energy bills, but only if they’re sized and installed correctly.
This guide walks you through when a tankless heater makes sense, how to choose the right system, and what to expect when you hire a plumbing professional.
What Is a Tankless Water Heater (and Is It Right for You)?
A tankless water heater (also called “on-demand”) heats water only when you turn on a tap, instead of storing hot water in a large tank.
Key benefits:
- Endless hot water (within capacity)
- Energy savings vs. older tank-style units
- Space-saving design that can free up a closet or floor area
- Longer lifespan than many traditional tanks
You might want a tankless water heater if:
- Your current water heater is 10+ years old or already failing
- You run out of hot water with back-to-back showers or laundry
- Your utility bills are high and you want to cut energy use
- You’re finishing a basement or adding bathrooms and need more hot water capacity
- You’d like to free up space in a utility room, garage, or closet
You may want to stick with a tank heater if:
- You’re planning to sell your home very soon and don’t want to invest in upgrades
- Your existing heater is fairly new and working well
- Major gas line or electrical upgrades would be required and your budget is tight
A plumbing pro can help you compare the cost to replace your current tank versus installing a new tankless unit so you can decide what makes the most sense.
Costs, Sizing, and What Affects Your Quote
Tankless water heater quotes can vary a lot. Knowing the main cost drivers will help you compare bids fairly.
Main factors that affect price:
- Fuel type: Gas (natural gas or propane) vs. electric
- Size and flow rate: How many bathrooms and fixtures you need to run at once
- Location: How easy it is to vent and route gas, water, or electrical lines
- Upgrades: Gas line upsizing, venting, electric panel upgrades, or water softening
- Brand and warranty: Longer warranties and well-known brands can cost more upfront
Typical scope of work includes:
- Removing the old water heater (if present)
- Installing the tankless unit and mounting bracket
- Connecting hot and cold water lines
- Connecting gas or electrical supply
- Installing venting (for gas units)
- Setting up condensate drain (for high-efficiency models)
- Testing, adjusting settings, and clean-up
When reviewing quotes, look for clear line items. A trustworthy pro will explain:
- Equipment cost vs. labor
- Any permits needed
- What’s included in their warranty and workmanship guarantee
- Whether maintenance or flushing is included for the first year
How to Choose the Right Plumber for Tankless Installation
Installing a tankless water heater is more complex than swapping out an old tank. A quality installation is key to safety, efficiency, and long-term reliability.
Look for these qualifications:
- Licensed plumber in your state or local area
- Experience with tankless systems, not just standard tanks
- Proof of insurance (liability and, if applicable, workers’ comp)
- Familiarity with local building codes and permits
Smart questions to ask before you hire:
- How many tankless water heaters have you installed in the past year?
- Do you handle permits and inspections, or is that my responsibility?
- Will you size the unit based on my home’s demand and climate?
- What brands do you recommend, and why?
- What’s covered under your labor warranty, and for how long?
- Will there be any extra charges for vents, gas lines, or electrical work?
It’s also wise to compare at least two to three quotes. With ALuxHome, you can get matched with trusted, verified pros and compare free quotes from local plumbing professionals while keeping your contact information private until you’re ready to hire.
What to Expect During Installation Day
Knowing the steps in advance makes the project smoother and less stressful.
Before the plumber arrives:
- Clear a path to your current water heater and proposed new location
- Plan for water and gas/electric to be shut off temporarily
- Keep kids and pets away from the work area
Typical installation steps:
- Shut off utilities (water, gas, and/or power) and drain the old tank
- Remove the old heater and prep the wall or mounting surface
- Mount the tankless unit at the planned location
- Connect water lines with shut-off valves and service ports
- Run gas or electrical connections, and install venting if needed
- Install condensate drain for high-efficiency gas models
- Turn systems back on, purge air, and check for leaks
- Program settings and walk you through basic operation
Most straightforward replacements take half a day to a full day. More complex jobs with gas line or electrical upgrades may take longer.
Before your plumber leaves, make sure you:
- Know how to adjust the temperature and reset the unit
- Understand basic maintenance, like annual flushing
- Have warranty documents and the model/serial number
Caring for Your Tankless Water Heater
A small amount of routine care helps your tankless system last longer and perform as promised.
Simple maintenance tips:
- Schedule annual flushing to remove mineral buildup (especially with hard water)
- Clean or replace water filters if your model has them
- Keep the area around the unit clear and well-ventilated
- Watch for error codes and call a pro if you see repeated issues
Ask your installer if they offer maintenance plans or reminders; this can prolong the life of your investment and keep you covered under warranty.
If you’re ready to explore tankless water heaters, ALuxHome can connect you with trusted, verified plumbing pros, help you compare free quotes, and protect your contact info until you’ve decided who to hire.