Janet... a few years ago, our old gas water heater (40gal tank) was giving problems.
I pulled it out and disposed of it. (wish now I had heard of the water tank rocket experiment...... oh well)
Since I was doing the work myself.... the option to replace or upgrade was on the table.
I opted to install one of the TANKLESS Instant water heaters. I bought it at Lowes. It was more expensive than a tank model BUT..... it also had tax rebates and it was so much smaller.... I gained several new shelves of closet space where the old tank used to set.
It was a few hours of re-plumbing some water lines, and removing the old gas line. I also needed to install a new electrical circuit to supply it.
It heats the water so hot that you can not hold your hand under it..... in seconds. It still takes the same amount of time for the hot water to reach the kitchen sink but no problem there...... and the water heater only runs when water is flowing at a certain level of flow. Temp & flow are adjustable. It is a 2 stage water heater. So if you have a faucet with a drip leak on the hot side.... you are leaking cold water, not heated water.
When I go on vacation or off for the weekend.... I no longer have to shut the water heater off to save money.
It's about the size of a normal computer case..... not very big compared to the tanks.
If you can work on plumbing and electrical yourself or have a competent friend who can help, this is the way to go.
For me, the total time for the removal, re-installation of the new tankless, plumbing and electrical was one day... working by myself.