The size of your water heater is dependent on your family’s needs. As a rough guide, a family of 1-2 will likely need at least a 30-gallon, a family of 2-3 will likely need at least a 40-gallon, a family of 3-4 will likely need at least a 50-gallon (electric) or 40-gallon (gas), and a family of 5 or more will likely need at least a 80-gallon (electric) or 50-gallon (gas). If you are going tankless, you will not have to consider the size, but you need to look at flow rate and temperature rise. It is often not feasible to use an 80-gallon heater in a residence but sometimes the use of two 40-gallon water heaters is an option if you have the room.