A new water heater is a long-term investment, so choosing a model based only on purchase price can be a mistake.
Tankless systems heat water as it is needed, but gas-fired models come with different technologies. The two common categories are condensing and non-condensing.
Condensing units capture additional heat from exhaust gases. This improves efficiency but requires condensate drainage.
Non-condensing units use a single primary heat exchanger and vent hotter exhaust. Their simpler design can make them suitable for some replacement projects.
When comparing models, look at:
Hot-water demand
Unit capacity
Efficiency
Venting
Gas supply
Installation space
Condensate drainage
Maintenance
Total installation cost
A professional assessment is especially important when replacing an existing gas water heater because the new unit may have different venting requirements.
For more information, read this guide to choosing between condensing and non-condensing tankless water heaters
The best water heater is not necessarily the most expensive or most efficient model. It is the one that fits the home's actual requirements.