A standard tank water heater lasts somewhere between eight and twelve years in our water. Hardness shortens that, because scale settles on the bottom of the tank, insulates the burner from the water it is trying to heat, and forces the unit to run longer and hotter than it was designed to.
But age alone is not a diagnosis. Plenty of the no-hot-water calls we run turn out to be a failed thermocouple, a tripped gas control, a burned-out heating element or a bad thermostat — parts that cost a fraction of a new unit and buy several more years. Anyone who quotes a replacement over the phone, without opening the panel, is guessing at your expense.
The symptoms that genuinely mean replacement are different in kind. Rusty hot water that stays rusty after the line clears means the tank lining is gone. Water anywhere around the base of the tank, as opposed to a drip from a fitting, means the tank itself has perforated and no repair exists for that. Repeated relief-valve discharge and loud rumbling from hardened sediment both point the same direction.
If replacement is the answer, three details determine whether the install passes inspection and lasts: correct sizing for the household's actual demand rather than a like-for-like swap, seismic strapping at the upper and lower third of the tank as California requires, and a temperature-and-pressure relief line run full-size to a legal termination. Those are the three things we most often find wrong on someone else's install.
Tankless is worth considering if the gas line and venting can support it, which is the part that gets glossed over in advertising. A tankless unit needs considerably more gas than a tank heater, so the existing line often has to be upsized, and it needs its own dedicated venting. Priced honestly, including that work, it still makes sense for a lot of households — just not for all of them.