When the indoor room is too small for any water heater, an outdoor tankless unit is the cleanest answer: it hangs on an exterior wall and frees the closet completely. In these tankless water heater for small room reviews we score four compact outdoor gas units on space saved, efficiency, flow and cold-weather protection.
All four were scored on the same criteria using manufacturer specifications and owner feedback. For our shortlist see the best tankless water heater for small room guide; our Editorial Policy explains how we work.
Top 3 Space-Saving Tankless Heaters From Our Reviews
Rheem Prestige RTGH-68XLN-2 6.8 GPM Outdoor Condensing Tankless
- Leak detection
- -30°F freeze protection
- 6.8 GPM
A. O. Smith ProLine XE ATO-140H 6.6 GPM Outdoor Condensing Propane Tankless
- Condensing
- Ultra-low NOx
- 15-yr warranty
Rinnai REP160eP Smart-Circ Outdoor Propane Tankless with Pump
- Smart-Circ
- Learns use
- 6.6 GPM
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How We Scored Space-Saving Tankless Heaters
| Criterion | Weight | What we look at |
|---|---|---|
| Space saved | 25% | Outdoor mount, compact size |
| Efficiency | 25% | Condensing, UEF |
| Flow | 20% | GPM for 1–2 baths |
| Cold-weather protection | 15% | Freeze protection |
| Extras | 15% | Leak detection, recirculation |
| Water heater | Score | Best for |
|---|---|---|
| Rheem Prestige RTGH-68XLN | 8.9/10 | Cold-climate outdoor installs |
| A. O. Smith ATO-140H LP | 8.7/10 | Propane homes |
| Rinnai REP160eP | 8.4/10 | Faster hot water |
| Noritz NRC66ODNG | 8.2/10 | Natural gas, mild climates |
Space-Saving Tankless Heaters Compared
| # | Product | Key Features | |
|---|---|---|---|
| 1 |  Rheem Prestige RTGH-68XLN-2 6.8 GPM Outdoor Condensing Tankless |
| Check Latest Price |
| 2 |  A. O. Smith ProLine XE ATO-140H 6.6 GPM Outdoor Condensing Propane Tankless |
| Check Latest Price |
| 3 |  Rinnai REP160eP Smart-Circ Outdoor Propane Tankless with Pump |
| Check Latest Price |
| 4 |  Noritz NRC66ODNG 6.6 GPM Outdoor Condensing Natural Gas Tankless |
| Check Latest Price |
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1. Rheem Prestige RTGH-68XLN-2 6.8 GPM Outdoor Condensing Tankless
Highest Overall Score: 8.9/10
- Outdoor condensing, 6.8 GPM
- Freeze protection down to -30°F
- Water and gas leak detection with shutdown
- High efficiency, water-saving setting
- Natural gas version
- Condensate drain needed
- Fuel: natural gas
- Flow: 6.8 GPM
- Model: RTGH-68XLN-2
Rheem’s outdoor Prestige scored highest because it adds strong freeze protection and leak detection to a compact outdoor unit.
It frees indoor space entirely.
Who the Rheem Prestige RTGH-68XLN fits best
Cold-climate outdoor installs.
Who should skip the Rheem Prestige RTGH-68XLN
Propane homes.
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2. A. O. Smith ProLine XE ATO-140H 6.6 GPM Outdoor Condensing Propane Tankless
Best Efficiency: 8.7/10
- Condensing, 120,000 BTU, 6.6 GPM
- Ultra-low NOx
- 15-year limited warranty
- Safety: exhaust and water temperature controls, overheat fuse
- Propane version
- Outdoor only
- Fuel: propane
- Flow: up to 6.6 GPM
- Model: ATO-140H 101
A. O. Smith’s ProLine XE is an efficient outdoor option for propane homes with 1–2 baths.
The long warranty adds peace of mind.
Who the A. O. Smith ATO-140H LP fits best
Propane homes.
Who should skip the A. O. Smith ATO-140H LP
Natural gas homes.
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3. Rinnai REP160eP Smart-Circ Outdoor Propane Tankless with Pump
Best Recirculation: 8.4/10
- Built-in pump with Smart-Circ learning
- About 6.1–6.6 GPM, 160k BTU
- Outdoor, compact
- Schedules recirculation to your routine
- Non-condensing
- Propane version
- Fuel: propane
- Model: REU-VEP2125WD-US-P
- Install: outdoor
Rinnai’s Smart-Circ learns when you use hot water and pre-warms the lines.
It suits small homes with a long run to the bathroom.
Who the Rinnai REP160eP fits best
Long pipe runs.
Who should skip the Rinnai REP160eP
Natural gas homes.
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4. Noritz NRC66ODNG 6.6 GPM Outdoor Condensing Natural Gas Tankless
Best Natural Gas Value: 8.2/10
- Condensing, very high efficiency
- About 6.5–6.6 GPM, 150,000 BTU
- Compact outdoor design
- Low NOx
- Limited listing detail
- Natural gas only
- Fuel: natural gas
- Model: NRC661-OD-NG
- Install: outdoor
Noritz’s ecoTough condensing unit is a compact outdoor pick for mild climates.
It suits 1–2 bathrooms.
Who the Noritz NRC66ODNG fits best
Mild-climate natural gas homes.
Who should skip the Noritz NRC66ODNG
Very cold regions.
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Outdoor Install Tips for Small Homes
- Check local code for outdoor clearances from windows and doors.
- Protect pipes from freezing with insulation and heat tape where needed.
- Plan a condensate drain for condensing units.
- Keep the unit accessible for flushing.
Frequently Asked Questions
Which space-saving tankless heater scored highest?
The Rheem Prestige RTGH-68XLN scored 8.9/10.
Are outdoor units safe in winter?
Models with freeze protection handle cold, but follow the manual.
Do outdoor units need venting?
They vent directly outdoors; condensing units still need a drain.
Is recirculation useful in small homes?
Yes if the heater is far from the bathroom.
Final Verdict: Tankless Water Heater for Small Room Reviews
The Rheem Prestige RTGH-68XLN is the best space-saving tankless heater we scored. The A. O. Smith ATO-140H is the most efficient propane option, and the Rinnai REP160eP has the best recirculation.
Overall: Rheem Prestige RTGH-68XLN-2 6.8 GPM Outdoor Condensing Tankless Check Latest Price
Efficiency: A. O. Smith ProLine XE ATO-140H 6.6 GPM Outdoor Condensing Propane Tankless Check Latest Price
Recirculation: Rinnai REP160eP Smart-Circ Outdoor Propane Tankless with Pump Check Latest Price
Move the heater outside and reclaim your space.
Looking for something else? Browse all of our Water Heaters guides and the wider Heating & Cooling section.
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