Tankless water heaters are cool , but the thing is you can ' t skimp on them . You gotta get the bestbiggest model or else you ' re gonna have a bad day . Also they aren ' t as small as you think the one I saw in my friend ' s house was the size of cabinet . Traditional water heaters have the advantage of a huge reserve tank of hot water . This means they don ' t need to be as powerful as a tankless heater , because it will take a while for the tank to be depleted . After you ' re finished showering , it slowly reheats the water . Tankless heaters need to heat the water , gallon for gallon , as you use it , so they need to be quite powerful , otherwise they can ' t keep up . There ' s no middle ground if you have two people showering at the same time , but the tankless heater is only powerful enough to heat enough water for one person , both of you are going to get lukewarm showers . With a traditional water heater , this isn ' t a problem although it will be if both people shower for too long .