Climate zone 5 -- Indianapolis, Indiana. I live in a very small house, 1000 sq ft., so I want to free up the large closet that currently holds the furnace and tanked water heater, both natural gas. I'm chucking the ducted hvac system in favor of a ductless mini-split and converting the tank water heater to tankless. I want to put the new water heater in either the attic or crawlspace. Is one location preferrable? Do I need to purchase a unit designed for outdoor use?

My goal is to move the laundry out of a bedroom and into that large closet space.