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Upgrading a Small Home for Better Functionality with a Tankless Water Heater Conversion

External tankless water heater unit

At McCray & Sons Home Services, we recently completed a tank to tankless water heater conversion in Sacramento, helping a homeowner make better use of space in a compact home.


This project wasn’t just about replacing a water heater. It was about solving a layout challenge and creating a more functional living space.


The Challenge: Limited Space in a 900 Sq Ft Home


The existing water heater was located inside a small laundry room that also functioned as a pantry. In a home of approximately 900 square feet, every bit of space matters.

The homeowner had already planned to replace the aging unit, but quickly realized:


  • The water heater needed to be relocated regardless of replacement type 

  • The interior location was limiting storage and usability 

  • A better long-term solution would improve both function and efficiency 


Sub-flooring plumbing

The Solution: Exterior Navien Tankless Installation


We converted the system to a Navien NPE-180S2 outdoor tankless water heater, mounted on the exterior of the home.


This allowed us to:


  • Free up valuable interior space 

  • Provide on-demand hot water 

  • Install a modern, energy-efficient system 

  • Create a cleaner and more accessible setup for future maintenance 


Scope of Work Completed


This was a full conversion, not a simple replacement. Work included:


  • Removal of the existing interior tank water heater 

  • Installation of a Navien NPE-180S2 outdoor tankless unit 

  • Rerouting hot and cold water lines under the subfloor to the new location 

  • Exterior wall penetration and sealing at crawlspace level 

  • Installation of a new gas line (approximately 15 feet) with proper sizing and reduction at the unit

  • Modification of the existing gas system, including removal of an unused branch line

  • Installation of a new dedicated 120V electrical circuit with exterior conduit 

  • Abandonment and interior capping of the existing B-vent system 

  • Installation of a tankless service valve kit for future maintenance 

  • Haul away and disposal of the original unit 


All work was performed in accordance with California Plumbing Code and manufacturer specifications.


External tankless water heater unit

Why This Homeowner Chose a Tankless Water Heater Conversion


This wasn’t an emergency replacement. The homeowner had time to evaluate options and ultimately chose tankless for a few key reasons:


  • Space savings in a small home 

  • Improved energy efficiency over time 

  • A desire for a modern, long-term solution 


Since the unit needed to be relocated regardless, upgrading to tankless made the most sense.


Real-World Results


After installation, the homeowner reported:


  • Everything is working great 

  • Hot water delivery is consistent 

  • Slight improvement in hot water speed 


In a smaller home, the difference in delivery time is naturally less noticeable, but the overall performance and space gain were immediate improvements.


Additional Work Completed During This Project


While addressing the water heater, the homeowner also chose to complete additional upgrades:


  • Ceiling fan installation with electrical box upgrade 

  • Light fixture replacement 


This is a great example of how homeowners can bundle improvements together, saving time and coordinating multiple upgrades efficiently.


Tank vs Tankless: What to Consider


If you’re considering a similar upgrade in Sacramento or the surrounding Sacramento area, here are a few things to keep in mind:


  • Tankless systems often require gas line and electrical upgrades 

  • Exterior installations can free up interior space 

  • Not every home sees dramatic performance differences, but efficiency and longevity are key benefits

  • Proper installation is critical to ensure long-term reliability and code compliance


Serving Sacramento and the Greater Sacramento Area


McCray & Sons Home Services proudly serves Sacramento and the surrounding areas, including West Sacramento, Natomas, Land Park, Curtis Park, East Sacramento, Arden-Arcade, and nearby communities.


As a licensed C36 plumbing contractor, we specialize in water heater upgrades, tankless installations, and full-service home improvements.


Thinking About Going Tankless?


If your water heater is aging or your home could benefit from better space utilization, a tankless conversion may be the right solution.


We handle everything from evaluation to installation, including coordinating permits and inspections with the City of Sacramento.


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