Our house has a pretty new and large water heater in the garage. It was there when we bought the house. The odd thing about it is that some days we can take a bath and there is plenty of hot water. Other days, we take a bath and there isn't enough. And we aren't really using the water anywhere else that would use up that much hot water.
Don't know if it's related, but the downstairs bathroom toilet seems to be using hot water for some reason. It didn't seem hot for the last two years.