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Yeah Ive heard that the tankless ones are good if they are close to the place were the hot water is going to be used, such as being close to a bathroom. This way you dont have to wait for hot water to begin to flow out of the faucet. Ive thought of it my self as well. My water heater is on the opposite side of the house from where the main bathroom is. Sometimes it takes a little while for hot water to get to the faucet. I have tried insulating all the hot water pipes but it didnt really make much of a difference.
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