Had two installed in rentals I manage and have one scheduled for a second home scenario. In existing older homes, it is advised to add a water softener when installing tankless as the extreme instant heat builds deposits. On newer homes with new piping, not so much. Not having a constant water heating up all the time vs instant hot & we are done is a plus. I also heard that tankless doesnt do well on multiple draws at the same time like laundry, dishwasher and showering. Tankless makes sense but expensive. On payback, I don't keep score. I go by results & quality life

Definitely pondered over my way, since we run all our heating with natural gas and these (my understanding) are all electric, and if power goes out so will they and they do not have large tanks . . . I don't like cold showers even though sometimes I need one! LOL

Water softener if hard water because those water coils clog up like your arteries if too many pizza, burgers, fries, etc.

our daughter put it in her house when she built, not much more than a traditional water heater and works great.  It's gas, not electric and very efficient. 

The biggest issue is the draw as Richie Alan Naggar mentions. 

I see them more in remodels in higher-end homes. 

So many people still want them installed in our area.

I put one in at my house.  Hated the tanks, having the water stay hot all the time makes no sense.  At the same time, installed liquid propane as it is heated by gas and, since it needs an electrical spark to start, put in a generator to keep the electricity going even during power outages. Love my improvements. 

I thought about it but haven't made the move. Would still need to see numbers

No clue about cost recovery but must say they are popular. Richie Alan Naggar brings up some points to consider.

Pete,

They are efficient, and we do not have one yet...A

Hello Peter Mohylsky. Broker Associate tankless water heater are popular in my area.

I had a tankless back when I was renting a house. I didn't pat attention since I was renting but the one time that I will never forget, was when I was taking a shower and the electricity went out. Not fun with ladder in my hair, in the dark, having to rinse my hair and body in cold water, lol.

Once you understand the principal operation of how tankless water heaters work most people will be glad they swapped that big ole' tank out. Proper setup is key and since tankless can be much hotter at the faucet the temperature rise they provide to the inlet water source should be set accordingly. The differences in the US can be anywhere from 35 to 75 degrees. This will also play on the GPH (gallon per hour) rating of the outlet fixture. The learning curve takes some getting used to but the closer your fixture is to the heating element rhat hot water gives 1st dibs you might say as opposed to those locations further downstream. The 10 year payback could be cited because an unlimited hot water supply may be overused at times. We've installed almost 200 electric units in our smaller apartments. Those units should last at least 20 years, they're about 10 years old now without a breakdown.  

After I moved into my new place, I needed to replace my water heater, and did inquire about the tankless style.    It needs different ducting, and would have been cost-prohibitive.    We don't see them often around here, but we have basements too where you usually find them.

I have seen a fair number of them in our region.  I've never heard of anyone installing one for "financial" reasons.  Typically it's for the lack of space, or ecological "saving of water".

I have not purchased any so far, however if in a remodel where space was at a premium it may we worth the investment.

They are not that popular in my Midwest area of Chicago. Most are the old kind. I think that cost is the biggest factor.

I’ve only had one for 18 months now . But in our case ( New Construction) it was also a Space Saver .

Depends on the energy source.
Natural gus and payback is within 3 years. Electric is much more expensive.
Also, volume is a consideration.
A family of 5 with multiple laundry loads daily will find the cost much higher in units of heat than for the ones are downsizing.
THen, there are those with the 7,000 SF house. Their choice is a continuious recycler or on demand. or wait 15 minutes.
Natural gas and 'on demand' are natural partners.

Payback? Nver once thought of payback-payback how?

...performance and function is what I like them for---instant hot water and saving water.