They are a bit expensive, and it will take some reworking to install it. But the expense will more than be covered in a short time from the savings. My inlaws put one in their cabin, and cant really tell any different. The water is cold for just a few seconds, then nice hot water, and it never runs out like the water heater tanks do.

For a more cheaper route you could just replace the old gas one with an electric water heater, but you will need to run electric to it, and would still need to insulate. Insulation would be the cheapest route to go, and yes make sure you drain the tank at least once of twice a year.

Good luck Deb!