A large share of houses in Hamilton, Burlington and the surrounding area still pay a monthly rental on the water heater, often one that came with the house and has been paid for several times over. At $30 to $50 a month a rental costs $4,000 to $6,000 over the twelve or so years a tank lasts. An owned gas tank water heater is installed for a fraction of that, and a tankless unit for about the same as the rental total. Getting out is a matter of reading the contract and sequencing the switch.
Start with the contract
Find the rental agreement, or call the rental company and ask for the terms on your account. You are looking for three things: the buy-out price, which usually falls each year with the age of the unit; the notice period for returning the tank; and any removal or disconnection fee. Ask for the age and model of the tank while you are on the phone. If the house changed hands, the contract may have transferred to you without your signing anything; the terms still apply, but so do the exit clauses.
Buy it or return it
- Tank under about six years old and the buy-out is a few hundred dollars: buy it. You keep a serviceable tank and the payments stop.
- Tank over eight to ten years old: return it. A rental tank at that age is near the end of its life; paying to buy it and then paying to replace it a year later is the worst of both.
- Tankless or combi in mind: return the tank and install the new unit on the same day, so the house is never without hot water.
What an owned unit costs
Typical Hamilton-area installed prices in 2026: a 40 or 50 gallon gas tank water heater, power-vented, about $1,800 to $2,800; a tankless on-demand unit $3,500 to $5,500 depending on the gas line and venting it needs. Both come with a manufacturer warranty, typically six to twelve years on the tank or heat exchanger, and our labour warranty in writing. Against a $40 monthly rental the tank pays for itself in about four years and the tankless in about eight, before counting the gas saving from the tankless unit.
The switch, step by step
- Give the rental company the notice the contract requires and ask for the return process. Some will collect; some ask you to have the installer leave the old tank at the curb or in the garage with a tag.
- Book the installation for a date after the notice period. We disconnect and cap the rental, install the owned unit, run or adjust the gas line and venting, test, and leave the old tank where the rental company has asked for it.
- Confirm the account is closed and the final bill is the last. Keep the disconnection date in writing.
What to watch for
- A rental company offering to "upgrade" you to a new rental when you call to cancel. It restarts the clock on a new contract.
- Buy-out prices that include a removal fee you do not need if you are keeping the tank.
- A tankless quote that does not include the larger gas line it usually needs. Ask what size line the unit requires and whether the quote includes running it.
- Doing it in the dead of winter without a plan: have the new unit on site before the old one is disconnected.
Tank or tankless
A conventional tank is the lower-cost install and still right for many homes. A tankless unit never runs out of hot water, saves a square metre of floor, and uses less gas, but it needs a larger gas line and the right venting, which is why it costs more to install. For a hydronic home, a combination boiler can replace both the boiler and the tank with one appliance. We quote both honestly for your house and your hot-water habits; details on the water heaters page.
To get the switch started, send the age and model of your rental tank and the buy-out figure the company quoted, and we will tell you which route makes sense and what the owned unit would cost installed.
Written by the 365 Heat technical team as general information for homeowners and is not meant to serve as a diagnosis of your system. Call for advice on your own particular heating appliances.
