My house came with a tankless water heater, which provides domestic hot water and heat. Mine runs on oil (yuck), but they can certainly run on your choice of fuels if you're buying one. I take LONG showers, and my wife often showers just before me. I never have to worry about running out.
I only have one piece of equipment in my basement instead of two. It's as old as the house, from 1992, and I don't forsee ever having to replace the whole unit, though someday I'd like to convert it to gas or replace it.
My dad says he tried one 30 years ago that couldn't keep up with the demand, and that soured him on the idea. I think maybe he didn't size it correctly. Mine has never failed to keep up with heating and showering at the same time, though I do run it very hot. Someday I'll try turning it down to see if it can still keep up.
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