I have lived on a boat since I was 13. We have tried just about every way of heating water (including one kettle at a time on a wood stove). Since boats usually don’t have room for a big water heater, nor the natural gas hookup, we usually had a hardly-functioning on-demand propane water heater. They were infernally breaking down. However these “instantaneous” water heaters have finally come of age due to market pressures, so now you can buy a highly efficient mainstream tankless heater for home use.
I now have a Bosch AquaStar 125HX. Not only is it smaller and more efficient than any water heater that uses a tank, it gives endless hot water at good pressures, and has worked flawlessly in a marine environment for the last three years on my houseboat. This water heater instantly lights up a propane heating system automatically the moment I turn on the hot water, yet it does not need a power cord (important if your power goes off, or if you aren’t on the grid). It does this by cleverly generating electricity from the water pressure in the pipes to spark a piezo igniter.
There is a whole AquaStar line from large ones for multi shower households, to the smaller ones like mine. Some are made to work in line with solar radiant heating, some with propane, some with natural gas. I really like the HX model because it works with no outside power source or pilot for ignition, making it very efficient, safe and reliable. They cost more than standard water heaters (mine was $550) but they pay for themselves fast in power bills since you don’t have to keep a large tank of water heated all the time; you only make hot water exactly when you need it.
I would absolutely use one of these even if I lived on land with access to a gas line. The hot water never runs out (which would be great in a household with a lot of people, or if you just like long showers) and its more efficient because its not heating a whole tank of water all the time.