The size of the water heater to install in your home will depend mainly on the number of family members you have. For example, a 50-to-60-gallon water heater would suffice if you have a family of four. A home with five to seven people would need a water heater with a 60-to-80-gallon water tank. You can use this guideline to determine your ideal size of water heater: One to two people: 30 to 40 Gallons Two to three people: 40 to 50 Gallons Three to four people: 50 to 60 Gallons Over five people: 60 to 80 Gallons