If you have a leaking water heater there is a serious problem.
http://waterheatertimer.org/Water-heater-leaking.html
Page shows how to limp along on a leaking water heater if your water heater needs replacement.
One of three things is causing the water:
1) Loose water connection on top of tank that is dripping down inside tank >> check pipes on top of tank.
2) The vent is clogged or not working correctly causing condensation inside flue pipe.
Condensation water is dripping back down inside tank.
Problem means possible CO poisoning if gas is not venting.
Look at vent pipe to see if joints are corroded.
Use long fireplace match > light match and put into draft hood at top of tank and see if smoke goes up.
Put hand at draft hood opening when water heater turns on to see if vent gas enters home.
Do same test when furnace turns on to see if furnace vent is pushing back into water heater.
Does water heater vent inside same pipe as furnace? You may need to set up separate vent for water heater if furnace gasses are pushing back into home.
Check furnace vent for obstructions.
Look at vent stack top of home to see if hood is in place.
Check if bird nest is built inside warm vent pipe.
Improper flue is top priority for getting fixed so vent gasses properly escape home.
You may have to call a plumber.
Professional plumbing forum:
http://www.thetankatwaterheaterrescue.com/forums/forum3/
3) Your water heater is rusted out.
A rusted tank has to be replaced.
It cannot be repaired.
However, before replacing tank, you do not want a tank failure where tank ruptures and water runs inside home until water is shut off.
This will cause major damage.
Protect yourself first.
Turn off water valve above tank.
Move gas knob to 'pilot' so burner is not heating water.
Open tub spout on hot side to relieve pressure on tank so it will not rupture.
Now you're protected.
Link above shows how to limp along on failed tank until you can replace heater.
You need a new gas water heater from Lowes or Home Depot
Look at label on side of you tank for gallons and btu's of your water heater.
Measure height to flue pipe so you get same height water heater, so pipes don't have to be changed.
You need a pipe wrench and teflon tape which will be wrapped on each pipe thread when pipes are reassembled.
Step1) Drain water heater using valve at bottom of tank.
http://waterheatertimer.org/Water-heater-will-not-drain.html
2) Turn off gas valve going into heater.
When gas valve is perpendicular to gas line, then gas is off.
Dissemble gas line to water heater.
3) Disconnect flue pipe and support flue pipe with wire so it doesn't not fall down. Flue pipe joints should be held together at each joint with 3 screws.
4) Turn off water. Shut off valve is on COLD side.
Disconnect water pipes.
5) Move old water heater out of way.
6) Set new water heater in place. Put water heater in drip pan.
7) Connect water pipes >> cold goes to side marked cold.
Hot to hot.
Buy new flexible water connector pipes at home center for easy installation of water pipes.
8) Connect gas line exactly as it was connected before.
Home center sells flexible gas line connector for easy installation of gas line.
To test for gas leak after installation, mix liquid soap with water and put around gas line joints to see if there are bubbles.
Natural gas has less pressure than water lines, so gas pipes are easy to seal with ordinary wrench.
9) install TP pipe that runs to floor. Use old one off old heater.
10) Fill tank completely with water until water is coming out of tub spout.
11) Turn on gas, and light pilot as shown in manual.
New gas heater sometimes have small water leak when first fired up, so ignore a bit of water.
12) Save water heater manual like it is gold, and read everything in manual.
Testimonial: "thanks good starting place how much is a cheap water heater "
Small natural gas heater may run about 300-350. If you're in the country and use propane, propane heaters cost more. I drop by Lowes all the time looking for scratch-n-dent models that have a few dollars off. Here's another tip: offer $50 less because Lowes runs coupons for $50 off any purchase over a set amount. Remember you also need to buy flexible connectors for water and gas lines unless old ones are in good shape. Plus you need a pipe wrench and teflon tape. These additional things cost another $68. Here's another angle depending on how much hot water you need. Buy a 20 gallon electric heater with 1500 Watt element. A 20 gallon electric heater is enough for 1 shower each hour. Add a 14 gauge wire to the water heater and plug into a receptacle. Connect water lines to side of tank and that's it. Natural gas water heater is cheaper to operate over the long haul, but small electric heater costs less to buy.
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First make sure there is no electrical connected to it before you touch any water heater, some high and mid efficiency units are run by a fan to exhaust the gas if it is a gas burning unit. let me know if its gas or electric.
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