PRIORITY 1: I have a 21 (yes 21) year old water heater (go AO Smith!) that I want to replace with a tankless water heater (live in MD).

WANT 1: I have a chimney that needs to be lined and a fireplace that can be converted to gas according to a level 2 inspection that I had done by a chimney company.

WANT 2: A high-efficiency furnace. I have a 10 year old furnace that one HVAC person said had a 'cracked' (cant remember the exact phrase used) heat exchanger (he said it was stills safe). He offered to replace it with a high-efficiency furnace. HVAC guy #2 did not mention any of that and fixed a problem with our furnace cycling on-off-on-off.

Both the water heater and furnace vent to the chimney. But both a tankless and a high-efficiency furnace can vent out a side wall.


  1. Should I be having one company do all the work (or most of the work?) The HVAC person offered to do the water heater and the furnace (didn't have the chimney inspection until after that)? The HVAC company? A contractor?
  2. Is there some order or some consideration of what is done first? Obviously my water heater is what I need the soonest, but I'm worried I won't take something into consideration.
  3. Any idea if anyone would finance all this work? (HVAC said they would do water heater and AC same as cash, not sure about if I added chimney to the mix)

Mechanical Room


3 Answers 3


Consider the options these upgrades unlock

The conversion from tank to instant water heating can free up substantial space on the floor. It might cause you to think about reconfiguring the room (positioning of work bench and other furniture/storage).

Some tankless water heaters use a single concentric type vent. That's an assembly of two pipes; the inner exhaust pipe is about 3 inch diameter and the outer pipe is about 6 inches diameter. Intake air flows through the space between the two pipes. Concentric venting is kind of nice, but routing is a little more challenging so use of a water heater with concentric vent might limit your placement options.

Do you have air flow problems in the HVAC system -- parts of the house that don't heat or cool well? There is sometimes an advantage to be had in moving the furnace so that the trunk ducting can be arranged better. An HVAC contractor might avoid suggesting this degree of work because it'll take extra time, drive his price up, and (in his mind) decrease the odds of winning the job. If these issues are applicable, bring up the idea of moving the equipment so they'll know it's something you want to consider.

Consider the future

If you have any hint of plans to install a finished ceiling in this space, make that clear to the contractors now. It would be all too easy for them to install new piping, or fail to move existing piping, in a way that could make future finishing a real headache.

Deal with the gas piping

A tankless water heater does not require a dedicated gas supply. Like all appliances, it needs sufficient supply. The existing piping is likely not sufficient to carry the added load of tankless water heater and fireplace. Consider whether it makes sense to remove and upgrade some of the existing piping or to add new piping. The existing pipe likely is sufficient for supplying the furnace and new fireplace, so adding new piping to supply only the tankless water heater is an option.


The tank water heater may be on "borrowed time" so it makes sense to upgrade first -- unless you would be moving the furnace also and wanting the new tankless water heater to use space occupied by the present furnace.


There's a lender for everything. That doesn't mean their terms are great. Larger service companies may carry the financing or have a partnership with a third-party lender. The financing doesn't have to be tied to the HVAC and water heater work, though -- you could consider a personal or "signature loan," a home equity line of credit, or a new or refinanced auto loan to generate some cash.

Combining the work

There are advantages to having one contracting company do all the work. You can expect them to coordinate so you won't have the two trades tripping over one another, for example. You'll have one number to call if there are any questions or problems during or after the work. You might also get a pricing or financing advantage (but not necessarily).

  • Also, the tankless ought to be moved nearer the points-of-use if that's at all possible. In my house the tankless was put in a utility closet (good) but copper pipe was extended to the new location, giving me an even longer wait for shower. Aug 27, 2021 at 20:07
  • Wow @Greg Hill Thanks so much for that info! A lot to think about (as I thought). One question: Who should I be talking to about this? The only HVAC person I talked to offered to do the tankless WH (I assume they would subcontract the work) and I assume would try to do the chimney too. Should I be looking at other HVAC people, or ask general contractors?
    – Joe
    Aug 28, 2021 at 3:34
  • Thanks for the input @Harper-ReinstateMonica Good Point Im considering recirculators for this very reason.
    – Joe
    Aug 28, 2021 at 3:35
  • 1
    @Joe Trade license classes are broad; companies and specific employees tend to be more skilled in some specific areas of one or several trade(s) and less so in others. Just now I searched "fireplace" in my state's licensure database and found companies with license class of "landscape and recreation," "HVAC," "general building," and "residential & small commercial nonstructural." It's possible you could find some company/person competent to do it all. Reputation and references might help you choose how many contractors to hire and which jobs to give them.
    – Greg Hill
    Aug 29, 2021 at 4:15

Let me start by saying I am not an HVAC professional. But I’ve dealt with this a few times before.

The chimney liner may not be be necessary if you are upgrading both your water heater and furnace as neither will likely vent through the chimney. The tankless definitely will not. If you go with a high efficiency furnace, it cannot use the chimney either.

Since the furnace is larger, I would recommend doing this first, or both at the same time. If your current hot water heater is electric, make sure the furnace installer leaves a capped nipple for the water heater.

You may want to talk to the gas company about switching to tankless. Since it’s heat on demand, it uses a lot of gas when it’s running. My water heater BTU output is more than my furnace. A low flow area, may be problematic in the winter when multiple hot water devices are running.


The sensible order of operation is:

  1. Switch to high-efficiency appliances first since their exhaust will be routed via PVC through your rim joist
    • This will eliminate your appliance dependency on your chimney
    • I don't know your budget. If you want to do the furnace and water tank at the same time then great or you can stagger them.
    • Water heaters should be handled by plumbers and furnaces should be handled by HVAC techs. Gas pipe is typically a plumber's domain. A tankless heater usually requires a dedicated home run pipe so that it can actually deliver the 199k btus.
    • Is there overlap? Yes, of course. If you have a competent plumber or HVAC tech then they could do both jobs. Lots of service companies specialize in both plumbing and HVAC but will have dedicated techs for each profession.
    • You vaguely mentioned an A/C towards the end of your question. I would absolutely not trust a plumber to do A/C work
    • When an appliance is removed from using the chimney the pipe should be closed off to prevent carbon monoxide backdraft
    • At no point do you need a chimney inspection for any of this work
  2. Take care of your fireplace/chimney desires
    • You should hire a chimney company for this. A plumber/hvac guy isn't going to know how to prevent your house from burning down.
    • The chimney inspection is practically built into this.

If you're pulling all the proper permits then you will have to abide by the town inspector as well, fyi.

  • thanks for your reply @MonkeyZeus. We could do it all, but all depends on the price tag. From your answer it sounds like I could trust HVAC to do the WH, WH shouldnt do HVAC, and neither should do chimney. Given that WH is most needed and HVAC could go another 5-10 years if we had to (and it lasts), are there considerations if doing the WH first?
    – Joe
    Aug 29, 2021 at 14:25
  • @Joe The main benefit of doing both WH and HVAC with the same company at the same time is that there could be a discount since your giving a lot of work to them. Since you plan to stagger these by 5-10 years then there is no benefit to having an HVAC company do your WH. Get quotes from plumbers to do the WH. In 5-10 years do the same with the furnace+A/C through an HVAC company. The main consideration with the WH is that you will likely need a dedicated gas line installed so budget an extra $1,000 just for that.
    – MonkeyZeus
    Aug 30, 2021 at 12:08
  • @Joe If you're asking about the pros/cons of a tankless water heater then that is a totally separate discussion which needs to take your lifestyle into account. FYI, the advertised GPM flow is based on incoming water temp of 70F but water is almost always in the 50-60 range. There are yearly cleaning procedures which you must follow amongst other things. Definitely research the topic before jumping on the tankless bandwagon. I installed a new 50 gallon tank 2 years ago and have zero regrets.
    – MonkeyZeus
    Aug 30, 2021 at 12:26
  • @Joe I'd be interested in hearing how things play out for you!
    – MonkeyZeus
    Aug 30, 2021 at 19:17
  • Thanks for your help @MonkeyZeus. I plan on taking my time and taking care of this in the next year, but I should updates this once I get the work done. Thanks again!
    – Joe
    Sep 2, 2021 at 2:25

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.