| Switching from conventional hot water hater to tankless hot water heater is not as easy as just swapping one unit for another. First, tankless heater requires some pipe relocating. Then, you cannot use your old vent. Third, and the most important issue, is gas. Tankless heaters have variable Btu consumption that ranges from 19,000 Btu's to 200,000 Btu's. ( Your old heater has set consumption limit at about 33,000 Btu's ).
If you are close to the main gas meter, than you are half way there. You can run dedicated gas line to your closet. Then you decide whether you want to use the exterior tankless or interior tankless. Than start thinking how you going to run your vent. Relocating hot and cold water is the least of the problem. Also, you will need an electrical outlet to plug it in.
You should also know what brand of tankless you wanna use. The major one are: Rinnai, Takagi, Noritz, Bosh, Rheem, Bradford White, Aquastar and Nuvieen.... It is my opinion that Rinnai and Noritz are very good brands.
So, there are few things to consider before you do the switch-over. Yes, it can be done but more complicated it gets, the more it costs. Gas is usually the biggest problem and expense. I would suggest that you call few plumbers to give you free estimate and to discuss the installation. They will tell you right away where you stand.
While the start up cost is high - the benefits are unsurpassed. Not only you will save energy, you will switch from century-plus old technology to present one. And that's something !
Good luck....Let us know how you did...Milo | 
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