I currently have a gas hot water heater that will be in a mud room when I finish remodeling. My understanding is that I'll need to change it to a closed combustion unit, maybe gas tankless, or traditional electric. Can anyone offer advice on which route to go? Does anyone have experience with the closed combustion units?

Do not install an electric tankless. They are horribly inefficient.

I have a gas tankless in my pantry. It was an easy install, but the 5" concentric ductwork is fairly expensive.

Thanks, how does the gas tankless perform when you just want warm water coming from the faucet. It seems that they would perform well with large flow rates, but what about the lower flows?

You might make a call to your Building Official in charge of CODEs/Ordinances, who might simply only require vents installed or louvered door on Mud Room entry from main house. Some may also vent to attic. He will spell it out.

Lightning Dexter said:

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Thanks, how does the gas tankless perform when you just want warm water coming from the faucet. It seems that they would perform well with large flow rates, but what about the lower flows?

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The flow has to be pretty low (almost off) for it to stop heating. In addition to the WH, I also have gas appliances and heat my home with gas. I've never had a monthly gas bill over $40.

Why a hot water heater?