Accessory Dwelling Units (ADUs) are becoming increasingly popular as backyard cottages, in-law suites, rental units, or tiny homes. While they may be smaller than a full-size house, they still need reliable hot water for showers, sinks, laundry, and kitchen use. A tankless water heater is an excellent choice for an ADU because it delivers hot water on demand, saves space, and is highly energy-efficient — a perfect fit for compact living spaces.
This guide will start with the best tankless water heaters for ADUs in 2025, then cover a full buying guide with tips on sizing, installation, and maintenance so you can find the right fit for your setup.
Top Tankless Water Heater Picks for ADUs
1. Rinnai V65iN Indoor Tankless Water Heater
The Rinnai V65iN is a natural gas tankless water heater that offers up to 6.5 gallons per minute (GPM), which is plenty for most ADUs with one or two bathrooms. Its compact design and direct vent system make it a great option for indoor installation without taking up much space.
- Best for: ADUs with natural gas service
- Pros: Reliable performance, good for simultaneous uses, compact
- Cons: Requires professional gas and vent installation
2. EcoSmart ECO 18 Electric Tankless Water Heater
The EcoSmart ECO 18 is ideal for ADUs that run on electricity. It delivers up to 4.3 GPM in warm climates and is perfect for one-bathroom setups. Its small size allows it to fit in utility closets, under counters, or on a wall with minimal space requirements.
- Best for: Small ADUs with limited space
- Pros: Space-saving, affordable, easy to install
- Cons: Requires adequate electrical capacity
3. Stiebel Eltron Tempra Plus 20
This electric model is known for quiet operation and steady water temperature, thanks to advanced flow control technology. It can supply hot water for a shower and sink running at the same time, making it perfect for an ADU with moderate hot water needs.
- Best for: ADUs with noise-sensitive living areas
- Pros: Silent, precise temperature control, sleek design
- Cons: More expensive than basic electric units
4. Rheem RTEX-18 Electric Tankless Water Heater
The Rheem RTEX-18 is a compact, efficient electric model that works well for small to medium ADUs. It delivers around 4.4 GPM in warm climates and is easy to mount on a wall near the point of use for maximum efficiency.
- Best for: One-bathroom ADUs with moderate use
- Pros: Affordable, responsive heating, simple installation
- Cons: Not suited for heavy simultaneous use
5. Camplux 2.64GPM Outdoor Portable Tankless Water Heater
For seasonal ADUs, tiny homes on wheels, or detached setups without much indoor utility space, the Camplux 2.64GPM is a portable propane model that can be installed outdoors. It’s budget-friendly, lightweight, and perfect for basic hot water needs.
- Best for: Seasonal or off-grid ADUs
- Pros: Portable, affordable, easy to set up
- Cons: Lower capacity and needs weather protection
Why Tankless Water Heaters Are Perfect for ADUs
ADUs have unique challenges compared to full-size homes. They often have limited installation space, lower hot water demand, and may be set up for either gas or electric service depending on design. A tankless water heater meets these needs by:
- Saving space: Wall-mounted and compact
- Providing endless hot water: No running out mid-shower
- Reducing energy waste: Heats only when needed
- Offering flexible installation: Indoor, outdoor, and portable options
Key Factors to Consider Before Buying
Fuel Type
If your ADU has natural gas, a gas tankless heater will provide high flow rates and efficiency. For all-electric ADUs, choose a model that matches your electrical capacity.
Flow Rate (GPM)
Match the GPM to your peak hot water needs. A one-bathroom ADU with light kitchen use might only need 3–4 GPM, while larger or more active units might need 5–6 GPM.
Climate Considerations
In colder climates, incoming water temperature is lower, so you’ll need a higher-capacity unit to reach your desired hot water temperature.
Space and Venting
For indoor units, check if venting is required. Electric models don’t need venting, making them simpler for small ADUs. Gas models require proper venting to ensure safety.
Noise Level
For small ADUs where the heater might be close to living or sleeping areas, choose a quiet model like the Stiebel Eltron Tempra Plus series.
Installation Tips for ADUs
- Check local building codes before installation
- For gas units, ensure proper venting and safety clearances
- For electric units, confirm your breaker panel can handle the amperage
- Mount in a location that allows easy access for maintenance
- If outdoors, choose a model with weather protection or an enclosure
Maintenance Recommendations
Keeping your tankless water heater in good condition will extend its life and maintain efficiency:
- Flush annually to remove scale buildup
- Clean inlet filters regularly
- Inspect connections for leaks
- For gas units, check venting and burners annually
Conclusion
The right tankless water heater for your ADU depends on size, fuel source, and hot water needs. The Rinnai V65iN is an excellent choice for natural gas setups, while the EcoSmart ECO 18 and Rheem RTEX-18 are great electric options. The Stiebel Eltron Tempra Plus 20 offers premium performance and quiet operation, and the Camplux 2.64GPM is a smart, portable pick for seasonal or off-grid ADUs.
Choosing the right model ensures your ADU has efficient, reliable hot water year-round, making the space more comfortable and functional for everyday living or guest stays.