Hot Water Tank

 Well, kind of like magic.
As we mentioned yesterday, our water heater flooded the laundry room over the weekend and as we suspected, it rusted out the bottom, creating a leak.  
The only solution is to replace the entire unit.
Initially we were under the impression that our insurance would cover the cost, but with any coverage there's always fine print.  While the water heater is covered, any code updates are not.  And the first thing out of the technician's mouth was 
"This entire thing isn't to code!"
Gotta love these older homes!  Frankly, we weren't surprised to hear him say this.  In our situation, the gas and water lines would have to be re-done and new lines brought into the laundry room from our crawl space.    
Price tag, $1,600 out of pocket.
We also inquired about upgrading to a tankless water heater.  We assumed it would still be placed in the laundry room, but he advised us to put it in the crawl space.  
This way we'd have more space in the laundry room and 
it would prevent additional gas and water lines to be installed.
Price tag, $3,800.
To be completely honest this isn't what we planned or wanted to spend our rainy day fund on.  But isn't that how it typically turns out?
So after weighing the pros and cons and discussing the finances, we've decided to go with the tankless water heater.  We will receive a payout from our insurance company and because tankless are more energy efficient we will be able to take advantage of a specific tax credit.  After all is said and done, it's a $1,200 difference between the two.  
For now, we plan to put off other home improvements to offset the cost.  
In the meantime, we're pretty excited about the extra corner space 
we'll gain in the laundry room!