It's not uncommon to see a point-of-use water heater near a sink. They're often tucked under the counter where they can warm your water, yet be out-of-sight. Some are even a good fit for recreational use. There are two basic designs on how they operate. They can hold hot water (tank-style), or provide instant hot water (tankless). Selecting the right style and size can be tricky, especially if you don't want to waste money on an overpowered unit that'll deliver more hot water than you'll ever need. As a general rule, the more money you're willing to pay, the more hot water your water heater will be capable of delivering. Quick NavigationTank-Style Water HeaterPurchase Considerations: Tank-StyleTankless Water HeaterPurchase Considerations: TanklessCapacity How large of a point-of-use water heater should you purchase? Well, that depends on a number of factors. Since these small water heaters won't be used to deliver hot water to your entire home, there is more leeway in finding the right sized unit.We'll take a close look at how to purchase both a tank-style unit and a tankless. But for now, you should know that each style measures capacity differently.Tank-style water heaters measure capacity in terms of tank size, where tankless units use flow rate, expressed in GPM (gallons per minute). So, you should have a good estimate of how much hot water you'll need, especially if you plan on using it as a stand alone source of hot water.Sole ProviderMany point-of-use systems are designed to have a variety of set up options. Some homeowners prefer to configure them so they are the sole provider of hot water for the source. They function entirely independently from the primary system. BoosterOthers install the water heater to operate as a booster to the main hot water system. This allows the small heater to deliver hot water until the larger tank can take over. The video below provides more details.Options on How to Configure a Point-of-Use Tank Types of Point-of-Use Water HeatersAs mentioned above, there are 2 different styles of point-of-use water heaters available: Tank-style and tankless. This article will cover both styles and what you should consider before making your buying decision.Tank-Style Water HeaterA tank-style water heater uses a small tank to store the water until it's needed. Although, tank systems come in many different sizes, a true "small" water heater will have a tank size of 2.7-gallons to 7-gallons. But don't get caught-up in the "small" label. Focus on finding the right size to meet your needs.Many top-of-the-line tank-style mini water heaters can be found for under $400, and some run far less. Stiebel Eltron makes a nice unit that's available in 3 different sizes, and Reliance has a popular 6-gallon unit.Stiebel Eltron Mini Tank Learn More How a Point-of-Use Water Heater Tank Works Purchase Considerations: Tank-StyleAlthough, purchasing a tank-style mini water heater is pretty straight forward, there are a number of factors that you should consider to make sure you find the right size and set-up for your needs.Main Factors to Consider Before PurchaseTo determine the correct sized tank there are 2 factors that you need to consider: Tank Size - How much water the tank can hold. Recovery Rate - The time needed to reheat the water within the tank.Finding the capacity of the tank size is pretty straight forward. The larger the tank, the more hot water you'll have readily available. However, the recovery rate is determined by the efficiency and wattage of the unit's heating elements.A heating element with a higher wattage should deliver a shorter recovery rate. When the recovery rate takes less time to heat cold water, you'll spend less time waiting for the water to heat. That may sound simple, but it can be a big deal . . . especially if you're using your small water heater for a shower!Configuration and Tank SizeAs you've seen in the videos above, there are several ways to configure your small tank water heater. Frequently they are installed directly to the water line and function as a standalone unit.If this is your chosen configuration, you'll likely be fine going with a small tank for the purposes of a hand sink or other low demand outputs.However, if you're planning on using it for a shower, dishwasher, etc. you may want to err on the side of a larger tank. A tank-style water heater can only deliver the amount of hot water within it's tank. Once the tank is depleted you'll have cold water until the unit can recover (remember the recovery rate?)If you're looking to give your main hot water system a boost, many units are designed with the option of installing it in-line with your home's main water heating system. When you open the hot water valve, you'll immediately have hot water delivered by your small tank, thus eliminating the need to wait until the hot water runs thru the plumbing from your main unit.What Size Should You Purchase?Depending on your home's hot water heating configuration, if a small tank-style heater is used as a standalone unit to service a hand sink or other small output, a smaller sized tank will most likely meet your needs. EcoSmart makes 4 small units specifically for low demand usage, such as hand sinks. However, if it'll be used for a shower, dishwasher or other higher demand outputs, you may want to err on the side of a larger tank, or use it as a booster to your main system. Tankless Water HeaterTankless water heaters are sometimes called flow-thru heaters because the water enters the unit cold and leaves hot. Since a tankless heater doesn't use a tank to store the water, the amount of water the unit can deliver is determined by its flow rate.The flow rate is measured in gallons per minute (GPM) and it's the critical piece of information you need in order to properly size your water heater. Any small tankless water heater that delivers less than 2.25 GPM would fall in this category. Although a larger unit could be used as well.There are many different brands available on the market today and most are below $300. EcoSmart offers 2 small tankless models. Stiebel Eltron has quite a few to choose between. This small tankless water heater from Rheem is an excellent choice. Rheem is a respected and quailty manufacturer who offers both smaller and larger units.Rheem Tankless Learn More How a Point-of-Use Tankless Water Heater Works Purchase Considerations: TanklessSelecting the right small tankless water heater can seem overwhelming. However, if you learn a few critical terms, it's actually not as hard as you might think.Main Factors to Consider Before PurchaseThere are 2 key pieces of information to take into account to properly size the water heater to your needs: Flow Rate - How many gallons of water the unit can heat every minute. Temperature Rise - How many degrees does the unit need to increase the temperature of the water. Let's take a closer look at each and cover how to calculate this information:Flow RateMeasured in gallons per minute (GPM), the Flow Rate is the amount of water the tankless is capable of heating at any given time. The higher the number, the more hot water your mini tankless water heater can deliver.Most units fall in the range of .50 to 2.25 GPM. Keep in mind that finding the right GPM to meet your hot water needs can be the difference between taking a hot or cold shower!Calculating Flow RateYou can determine your maximum flow rate by adding the GPM of each fixture that the tankless will be servicing. With a point-of-use heater, this isn't set in stone, but it is good to know, especially if your unit will be used as a stand alone water heater. This information is less critical when the unit is configured as a booster tank.According to the 2010 Plumbing Standards, the average gallons per minute (GPM) is used for the following water outlets: Standard Shower Head: 2.0 GPM Water-Saving Shower Head: 1.5 GPM Standard Hand Sink: .50 GPM Bath Tub: Up to 4.0 GPM Kitchen Sink: 1 to 2 GPM Dishwasher: 1 to 2 GPM Washing Machine: 1 to 1.5 GPMKeep in mind that these are just reference points. If you are adding a tankless water heating system to service your entire home, you'll want to be very careful to get this right. But with a point-of-use system there is some leeway.For instance, if you have a hand sink (.50 GPM) and a standard shower head (2.0 GPM), you might think that you should buy a unit that can deliver 2.5 GPM of hot water. However, you likely won't be servicing hot water in both outlets at the same time.Also, if you plan on using your small tankless heater as a booster to your main water heating system (which is probably a really good idea if you are servicing a shower head) a much smaller tankless should work fine.Temperature RiseTo determine the temperature rise, subtract the incoming water temperature from the hot water temperature. As an example, if the incoming water is 65-degrees, and your desired hot water temperature is 110, your temperature rise will be 45-degrees.In other words, your tankless water heater will need to heat the water 45-degrees to bring it to your desired temperature. The higher the temperature rise, the lower the GPM the water heater will be able to deliver.How Temperature Rise Impacts GPMIf, in the Winter, your tankless water heater needs to increase the incoming water temperature by 60-degrees (a 60-degree temperature rise) it may be able to deliver .45 GPM of hot water.But, in the Summer, the temperature rise may only be 30-degrees, in which case, the unit's GPM may increase to 1.85. That's a significant difference and something to take into account . . . especially in cold climates.When you begin shopping for a tankless water heater, you may notice that manufacturers tend to lead with the GPM a unit is capable of delivering. However, you often don't know the temperature rise they used for their calculations. That's why when you know your temperature rise you'll be able to accurately compare the water heater's efficiency.Sizing a point-of-use heating system doesn't need to be exact. But if you have the basic information on how these units are sized, you'll be able to make an informed purchase decision and find the small water heater that best meets your needs.Want to Learn More?Check out our post that covers everything you need to know about 110V tankless water heatersAre you looking for some of our top picks? Check out our post on the best tank-style and tankless small water heaters.