Is a Tankless Water Heater the Right Water Heater for Vacation Rentals?

Best Water Heaters for Summer Rental Properties

When it comes to vacation rentals, providing guests with a comfortable and seamless experience is paramount. As a vacation property owner, choosing the right water heater is a crucial decision. Traditional tank water heaters have been the norm for decades, but in recent years, tankless water heaters have been gaining popularity. The question on every vacation rental owner’s mind is, “Is a tankless water heater the right water heater for vacation rentals?” In this tankless water heater guide, we’ll explore the features, benefits, and drawbacks of installing an on-demand water heaters for vacation properties, drawing from expert insights and first-hand experiences to help you make an informed decision.

tankless water heater installation, plumbing contractor Atlantic County New Jersey

Tankless Water Heaters: An Overview

In this section, we’ll provide a brief overview of tankless water heaters and how they differ from traditional tank water heaters.

What is a Tankless Water Heater?

A tankless water heater, also known as an on-demand water heater, is a modern heating system that heats water directly without the need for a storage tank.

How Does a Tankless Water Heater Work?

Unlike traditional tank water heaters that continuously keep a large tank of water hot, instant heat water heaters only heat water when it is needed. When a hot water tap is turned on, cold water travels through the unit, where it is rapidly heated by electric coils or a gas burner, providing an instant supply of hot water.

Key Advantages of Tankless Water Heaters

These water heaters offer several benefits that make them attractive to vacation rental owners.

  • Endless Hot Water Supply: With an on-demand water heater, you won’t run out of hot water, ensuring your guests’ comfort during their stay.
  • Energy Efficiency: Tankless water heaters only heat water on demand, reducing energy consumption and utility costs.
  • Space-saving Design: Tankless units are compact and can be mounted on walls, freeing up valuable space in your vacation rental.
  • Longer Lifespan: Instant heat water heaters tend to last longer than traditional tank heaters, saving you money on replacements.

Reduced Risk of Water Damage: Without a large storage tank, the risk of leaks and water damage is minimized.

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Suitability for Vacation Rentals

Now, let’s dive deeper into the question of whether a tankless water heater is the right choice for vacation rentals.

Factors to Consider for Vacation Rentals

Before making a decision, consider the following factors:

  • Occupancy Rate: Assess how frequently your vacation rental is occupied. If it sees a high turnover of guests, a tankless water heater’s efficiency may be beneficial.
  • Peak Demand: Analyze the number of guests your property can accommodate at once. These water heaters have limitations on the volume of hot water they can produce simultaneously.
  • Initial Cost: On-demand water heaters generally have a higher upfront cost than traditional tanks. Evaluate your budget and long-term savings potential.
  • Installation Space: Tankless units require proper ventilation and gas lines, so ensure your property meets the necessary requirements.
traditional water heater.
Tankless Heater Sizing Guide

Tankless Water Heater vs. Tank Water Heater

To make an informed decision, it’s essential to compare tankless water heaters with traditional tank water heaters.

Tank Water Heaters: Pros and Cons

Let’s explore the advantages and disadvantages of traditional tank water heaters:


  • Proven Technology: Tank water heaters have been used for decades and are a reliable source of hot water.
  • Lower Initial Cost: Tank water heaters are generally more affordable upfront.
  • Easy Installation: They have straightforward installation requirements.


  • Limited Hot Water Supply: Tank water heaters can run out of hot water during peak usage times.
  • Higher Energy Bills: Keeping a large tank of water hot continuously can result in higher energy bills.
  • Larger Footprint: Tank water heaters take up more space in your property.

Fact: Water heaters are the 2nd largest expense on your energy bill. Accounting for 14-18% on your utility bills.

Tankless Water Heater Efficiency

One of the significant benefits of tankless water heaters is their energy efficiency. Let’s explore this aspect in more detail.

Energy Efficiency of Tankless Water Heaters

The on-demand water heaters are known for their energy-saving capabilities. They are rated by their energy factor (EF), which measures how efficiently they convert energy into hot water.

According to the U.S. Department of Energy, tankless water heaters typically have an EF of 0.82 to 0.98, while traditional tanks have an EF of around 0.67. This indicates that these units waste less energy and are more efficient in heating water.

Exciting news for homeowners, investors and landlords! The Department of Energy (DOE) has crunched the numbers and found that a tankless water heater can save you big bucks. With 24-34% higher energy efficiency compared to traditional tank heaters, you could save an average of $108 annually on utility bills. 

Plus, with a lifespan of 20 years (double that of tank heaters), the total potential savings could reach a staggering $2,160. Ready to cut costs and reduce your carbon footprint? 

Consider making the switch to a tankless water heater today!


Dept. of Energy

Tankless Water Heater Sizing

Finding the right-sized water heater is crucial for vacation rentals. Let’s understand how to size a tankless water heater correctly.

Sizing a Tankless Water Heater for Vacation Rentals

The size of the on demand water heater you need depends on the maximum hot water demand of your vacation rental. To determine the appropriate size, consider the following:

  • Flow Rate: Calculate the total flow rate required when multiple hot water fixtures are used simultaneously.
  • Temperature Rise: Determine the temperature rise needed to heat the incoming cold water to the desired hot water temperature.
  • Inlet Water Temperature: Know the average groundwater temperature in your area.
  • Peak Usage: Consider the maximum number of guests or occupants who might be using hot water at once.

By accurately sizing your tankless water heater, you can ensure an uninterrupted hot water supply for your vacation rental.

Repairing water heater. Young man working in uniform at construction at daytime

Tankless Water Heater Maintenance

Regular maintenance is essential to keep any water heater functioning optimally. Let’s explore the maintenance requirements of tankless water heaters.

Maintenance of Tankless Water Heaters

Tankless water heaters require periodic maintenance to perform efficiently and last longer. Some maintenance tasks include:

  • Flushing the System: Over time, mineral deposits can accumulate in the unit. Flushing the system annually helps prevent clogs and maintain performance.
  • Cleaning the Air Intake and Exhaust: Dust and debris can accumulate in the air intake and exhaust, affecting the unit’s combustion process. Regular cleaning is necessary.
  • Inspecting Venting System: Ensure the venting system is free of obstructions and working correctly to prevent carbon monoxide buildup.
  • Checking for Leaks: Regularly inspect for leaks to prevent water damage.

Tankless Water Heater Lifespan

The lifespan of a water heater is an essential consideration for vacation rental owners. Let’s explore how long these water heaters typically last.

Lifespan of Tankless Water Heaters

On average, a well-maintained tankless water heater can last up to 20 years or more. This extended lifespan makes them an attractive option for vacation rentals, as you can expect many years of reliable service. This is nearly double that of a traditional tanked water heater. It is important to weight the initial cost to the lifespan from a value perspective.


Rinnai Tankless Water Heaters
Ecosmart Tankless Water Heater
Noritz Electric Tankless Water Heater
Navien Gas Tankless Water Heater.

Popular Brands of On Demand Water Heaters for Your Rental

  • Rinnai Tankless Water Heaters

Rinnai is a well-established brand known for its high-quality tankless water heaters. With a wide range of models to choose from, Rinnai offers both gas and electric options to suit various household needs. Their tankless water heaters are praised for their energy efficiency, reliable performance, and advanced technology. Rinnai also provides excellent customer support, making them a popular choice among homeowners seeking a top-notch tankless water heating solution.

  • EcoSmart Tankless Water Heaters

EcoSmart is a leading brand in the eco-friendly tankless water heater market. Their units are known for their sleek design and compact size, making them ideal for homes with limited space. EcoSmart tankless water heaters are energy-efficient and offer precise temperature control, ensuring a comfortable hot water experience. Additionally, their models are designed to reduce standby heat loss, further contributing to energy savings. For environmentally-conscious consumers looking for green and efficient water heating solutions, EcoSmart is a popular go-to brand.

  • Noritz Tankless Water Heaters 

Noritz is a trusted name in the tankless water heater industry, known for its durable and long-lasting products. Their tankless water heaters are designed with innovative technology to provide consistent hot water on demand. Noritz offers a variety of models, including both residential and commercial options, catering to different hot water needs. Customers appreciate Noritz’s focus on safety features, ease of use, and low maintenance requirements, making them a popular choice for families and businesses alike.

  • Navien Tankless Water Heaters 

Navien is a renowned brand recognized for its cutting-edge tankless water heaters. Combining efficiency, performance, and innovation, Navien’s units deliver hot water in a flash while reducing energy consumption. Their tankless water heaters are known for their smart technology, such as Wi-Fi connectivity and advanced controls, allowing homeowners to monitor and adjust settings remotely. Navien’s commitment to excellence and continuous improvement has earned them a loyal customer base and a reputation for being a reliable and forward-thinking brand.

When considering installing a tankless water heater for your rental home, these four popular brands stand out for their quality, efficiency, and customer satisfaction. Each brand offers unique features and benefits, so take the time to explore their product offerings and find the perfect tankless water heater that suits your specific requirements.

Tankless Water Heater FAQs

Yes, tankless water heaters provide hot water instantly as they heat water on demand.

The capacity of tankless water heaters varies. Larger units can handle multiple showers, while smaller ones may struggle to keep up with high demand.

Yes, tankless water heaters generally have a higher upfront cost due to their advanced technology and installation requirements.

Yes, these water heaters require proper venting to ensure safe operation and the expulsion of combustion gasses.

Yes, tankless water heaters are more energy-efficient than traditional tank water heaters, resulting in potential cost savings over time.

Tankless water heaters should be maintained annually to prevent mineral buildup and maintain efficiency.


Choosing the right water heater to install for your vacation rental is a significant decision. While tankless water heaters offer numerous benefits such as energy efficiency, longer lifespan, and endless hot water, they may not be suitable for all vacation properties. 

Consider factors like occupancy rate, peak demand, installation space, and budget before making a decision. By carefully weighing the pros and cons of tankless water heaters and traditional tanks, you can ensure that your vacation rental provides a comfortable and delightful experience for your guests.

Water Heater Service, Service Area In Atlantic County, NJ

Atlantic City
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Egg Harbor Township
Estell Manor

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Hamilton Township
Hammonton Township
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Port Republic
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Ventnor City

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