Visible corrosion, especially around the bottom or top of a water heater, usually means you will need to replace it soon. But not always. The rust that happens on the inside of the tank of your water heater is what causes it to fail, and that sometimes progresses at a different rate and for different reasons than the rust on the outside.
How fast the outside of your water heater corrodes depends primarily on the environment where it is installed. The high humidity of a garage or attic speeds up rust on both the shell and any pipe connections faster than at an indoor location. But corrosion of the tank is caused by something different: an electrolytic reaction between the water and tank. The tank has both a glass lining and a sacrificial anode for protection against corrosion. An anode literally sacrifices itself and corrodes away first to save the tank. But if the anode is not checked and replaced when used up, tank corrosion accelerates rapidly. And the tank lining provides a barrier, although eventually the corrosion overtakes it.
It is possible for a water heater in a hallway closet with a sacrificial anode that is toast to both look fine on the outside and be about to start leaking soon on the inside, and it does happen sometimes. But typically the inside and outside corrode roughly in tandem. So rust, along with that powdery white buildup of galvanic corrosion at the pipe connections, usually means replacement ahead.
If your water heater has corrosion that is spreading, and it's more than 12-years old, and in a location where leakage would damage your house—wood floors around it, for example—you might consider doing a “preemptive strike” and change it now.
Also see our article What can I do to make my water heater last longer?
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Here’s links to a collection of more blog posts about WATER HEATERS:
• Are water heaters required to be raised off the floor?
• Can a Temperature and Pressure Relief (TPR or T&P) valve be mounted to discharge horizontally?
• Where are gas water heaters not allowed to be installed?
• Is the minimum size water heater inlet pipe 1/2" or 3/4" according to the building code?
• Can you use a light switch for a water heater disconnect?
• How can I tell if a water heater is HUD-approved for mobile/manufactured homes?
• Can you wire a 240-volt water heater with 120 volts?
• Is it alright to have a shut-off valve on both the hot and cold water pipes at a water heater?
• What is the minimum clearance to doors and windows for an outdoor tankless gas water heater?
• What is required clearance for access and working space in front of an electric water heater?
• Why is the water heater older than the house?
• Does a water heater need a shut-off valve?
• Why should a tankless water heater have an isolator/service valve kit installed?
• When was a gas water heater first required to be elevated 18 inches above a garage floor?
• Can the temperature and pressure relief (TPR) valve discharge pipe for a mobile/manufactured home water heater terminate under the home?
• What is the purpose of a thermostatic mixing valve above a water heater?
• Does a tankless gas water heater still work with no electricity during a power outage?
• What is the difference between a manufactured/mobile home water heater and a regular water heater?
• Does a tankless water heater require a pressure relief valve?
• When is a water heater drain pan required?
• Why is there water in my water heater drain pan?
• What does it mean when a water heater Temperature/Pressure Relief (TPR) discharge pipe is "trapped"?
• Can I leave a gas water heater in place when remodeling a garage into a family room or bedroom?
• Where do I find the water heater in a mobile home?
• Does a tankless water heater in an attic require a drain pan?
• Does an electric water heater require a disconnect?
• Is a catch pan and drain piping required for a replacement water heater?
• What is the difference between a single element and dual element electric water heater?
• What is an FVIR water heater?
• What is a dielectric union?
• What's that powdery crust on the pipe connections at the water heater?
• What are the most common installation mistakes with water heater replacement?
• Why is my water heater making strange (rumbling, gurgling, knocking or banging) noises?
• How can I determine the age of a water heater if the serial number is missing or decoding it is impossible?
• How does a hydronic heating system work?
• What is the difference between a regular water heater and a direct vent water heater?
• What is the difference between a regular water heater and a power vent water heater?
• What is backdrafting at a gas water heater?
• How do I determine if a water heater is gas or electric?
• What does it mean when a gas appliance (water heater, furnace, or range) has been "red tagged"?
• What's the valve with the flip-up handle on the water heater for?
• Why is an older water heater an insurance problem?
Visit our WATER HEATERS page for other related blog posts on this subject, or go to the INDEX for a complete listing of all our articles.