Water Heater drain leaks and has caused rusting on tank

You didn't provide sufficient information to be able to answer your question. Specifically, where is the water leaking from? A valve, a connection or from the body of the heater?

If this is an old water heater and is leaking from the body of the heater, most likely cause is the tank is rusted out and there's no way to fix it. Need to replace with new.

If this is a new water heater and assuming all the piping is hooked up properly, if the leak is coming from the pressure relief valve, try toggling the handle to see if you can get it to re-seat properly. If not it probably will require a new T&P Valve.

If it's not leaking at the T&P Valve and is leaking from the body, it sounds like the tank was damaged either in shipping or installation and will have to be replaced (no way to fix this).

Water heaters are sealed tanks. The only places where water would normally be able to leak would be:

1. Water inlet
2. Water Outlet
3. Heating elements
4. pressure release valve
5. drain valve

Leaking at the base is indicative of a rusted-out tank. But before you trash the old one, secure power and remove the side covers where the heating elements are installed to verify they are not leaking. If they are OK, the unit probably needs replacing. And even more likely if the unit is more than 10-12 years old. Don't delay on this as leaks from rusty tanks can blow out and cause serious water damage,

Copy following link for troubleshoot resources:
http://waterheatertimer.org/Leaking-water-heater.html

Replace rusted tank
http://waterheatertimer.org/How-to-install-gas-water-heater.html

Prevent rusted tank.
If nipples are leaking, and they did not leak before, then tank has most likely rusted out and needs replacement.
Cause for rusted tank is depleted anode rod.
Inspect and replace anode each 1-3 years.
http://waterheatertimer.org/Replace-anode-rod.html

If you need further help, I’m available over the phone at https://www.6ya.com/expert/gene_9f0ef4df2f9897e7

If the drip is coming out of drain valve: Put a hose cap over end of drain valve.
If water is seeping out of cracked drain vale, then replace it.
If the leak is seeping around previously sealed threads, then tank may be rusted beyond repair.
http://waterheatertimer.org/How-to-replace-water-heater-drain-valve.html
http://waterheatertimer.org/Leaking-water-heater.html

If you need further help, I’m available over the phone at https://www.6ya.com/expert/gene_9f0ef4df2f9897e7

Your tank is rusted out and needs to be replaced.
Link below is a troubleshoot for leaking water heater.
http://waterheatertimer.org/Leaking-water-heater.html

Protect yourself first:
If your tank is rusted, there is danger of rupture.
My friend welded his leaking tank, but he assumes the risk.
Ruptured tank can cause massive damage and water runs until it is shut off.

Hot water tank is under pressure because hot water expands and pushes against tank wall.
Turn off water to tank.
Turn off power supply:
Electric: turn off circuit breaker.
Gas: rotate knob to pilot so pilot stays lit but burner will not fire. To turn back on, rotate knob to ON.
Open hot side bathtub valve and relieve pressure on tank.

You can limp by with rusted tank by turning water heater on when hot water is needed.
Shower uses 5-9 gallons hot water
Bath uses 12-15 gallon hot water
Ordinary gas heater makes 41 gallons hot water per hour
Ordinary electric heater makes 20 gallons hot water per hour.

I buy water heaters at Lowes, Home Depot, Ace.
Look for scratch and dent models.
Buy drip pan for water heater.
Wrap electric heater totally with insulation except TP valve.
Buy new flexible connectors for water lines.
Offer 15% less than marked price on tank, because the store makes money on additional items.

> Most people can install their own electric heater since you just connect water pipes and electric wire, and it's done. Read link below since there are tips that help you buy and install electric.
> Generally people are nervous about installing gas water heater, so step-by-step instructions are shown on link below. Remember gas line is under less pressure than water line, so if you can install a water pipe, you can install gas line to water heater with crescent wrench, and soapy water to check for leaks.
How to install gas water heater:
http://waterheatertimer.org/How-to-install-gas-water-heater.html

Add a comment for more free help.
Also take advantage of fixya phone service.
For a price, fixya expert speaks with you over phone while you work on water heater, or any do-it-yourself project.

A) Calculate date of water heater manufacture from serial number located on side of tank:
http://waterheatertimer.org/pdf/WaterHeaterSerialNumberDecoder.pdf
Date of manufacture is not date of installation.
Warranty is usually from date of manufacture
Serial number also shows tank size in gallons, tank volts and watts, and whether tank has 1 or 2 elements.

B) Troubleshoot leaking water heater:
http://waterheatertimer.org/Water-at-bottom-of-water-heater.html
Several things can be looked at to see where leak is coming from.
Carefully go over tank pipes and valves to eliminate every suspect.
Final suspect: tank is rusted out.

C) If tank is rusted out, then tank needs to be replaced before it ruptures.
Ruptured tank can cause major damage and water runs until shut off.
To prevent rupture, turn off power to heater, turn off valve located above tank, open tub faucet for a moment to relieve pressure on tank.
Turn on heater only when needed until new tank is installed.
4500 Watt water heater produces 21 gallons hot water per hour.
Shower uses 6-9 gallons hot water. Bath uses 12-14 gallons hot water.

"It is possible to limp along with a failed water heater if the leak is slow and if you turn off power and water when not using hot water. That trick could buy time, possibly up to 3 months. With time, you can consider how to make the system do more for less as well as comparison shop, get competitive bids, etc"

D) Now you're home is safe from damage.
If tank is only 5 years old, it rusted out pretty quick.

There are three things you can do so next heater lasts longer.

1) Learn about anode rods, and inspect anode rod every 1-3 years.
Loosen anode rod before installing new tank so replacement is easier.
http://waterheatertimer.org/Replace-anode-rod.html

2) Attach electrical ground wire between hot and cold pipes to prevent stray current from reducing life of water heater
http://waterheatertimer.org/9-ways-to-save-with-water-heater.html#straycurrent

3) Flush tank each 6 months to prevent sediment
http://waterheatertimer.org/Clean-sediment-out-of-water-heater.html#flushelectric

12 year old water heater is getting near the end.
Some tanks last 20 years, but that's the exception.
To find exact age of your brand water heater:
http://waterheatertimer.org/pdf/WaterHeaterSerialNumberDecoder.pdf

Leaking TP valve:
1) Lift TP lever and gently lower back into position to see if that stops leak.
Occasionally something gets stuck in the valve.
2) Sometimes water heater temperature gets turned up because heater is not producing as much hot water as before, and higher temps cause TP to release pressure because of overheating.
Dial temperature down to 120 degrees.
http://waterheatertimer.org/How-to-adjust-water-heater-temperature.html

3) If steps above don't fix problem, replace TP valve >> TP valves have 125 or 150 degrees rating >>> older tank shouldn't be running above 125 because higher temps cause more pressure on tank, so thermostat should be lower than 125 degrees TP rating.
Buy replacement TP at any hardware store + a roll of teflon tape to seal pipe threads.
Turn gas control to pilot ... this will keep pilot lit but burner will not fire.
Let water cool, and then drain some water out of tank.
If TP valve is on side of tank, then open drain on side of tank and drain water until it is lower than valve level. Open bathtub spigot to let air into line.
http://waterheatertimer.org/Water-heater-will-not-drain.html
Be careful around water that is higher than 120 degrees F >> you can get burned quickly >> apply cold water to any burn.
Use pipe wrench and unscrew TP valve counterclock-wise.
Install new TP and put teflon tape on threads.
Re-fill tank completely and open tub valve on hot side until water is running >> then turn gas control back to original position.
Do not fire up any water heater before tank is completely full of water or this could damage tank.

To read more preventative information about water heater leaks and age problems:
http://waterheatertimer.org/Water-at-bottom-of-water-heater.html

I wrote a page on leaking water heaters with resources and information:
Page lists things to check.
http://waterheatertimer.org/Water-at-bottom-of-water-heater.html

Also run hand over tank to find warm spot that says where leak is coming from
A rusted tank cannot be repaired.

If your tank is rusted out, it might burst open and flood the area.
Hot water inside tank is under pressure.
Turn off heat source to water heater.
Turn off water valve located above tank.
Open tub faucet on hot side and relieve pressure from tank.

You can limp along with a leaking water heater by turning it on when hot water is needed.
For example a shower uses 5-9 gallons hot water.
Turn gas water heater on for 15-20 minutes.
Turn electric on for 20-30 minutes.

To conserve resources with next heater:
http://waterheatertimer.org/9-ways-to-save-with-water-heater.html

If you'r really lucky you may find a leaking fitting on top of the water heater thats draining down inside the shell and out the bottom, otherwise its time to replace a rusted out water heater.
Sorry

If you are reffering to the drain valve at the bottom of the hot water tank. It may be leaking due to the O ring being cracked or worn out. You can either drain the tank and replace the valve or you can buy a hosebib brass cap and thread it on the existing valve. There is no cause for alarm when doing this as this valve is just to drain the tank when replacing your hot water heater