Hi all. I currently have a forced air system for the bulk of the house, but 2 basement rooms (app. 700SF) use baseboard heat with the water heater as the source. The WH is about to give up the ghost and I was musing whether I could replace this monster 75 gallon propane WH with a smaller unit- say 50-60 gallons and put in a small tankless heater on the baseboard feeder line to boost the temp up. My theory/hope is that the input from the water heater would be of high enough starting temp that even a small tankless would really boost the water temp and this would make the baseboard more efficient and put less demand on the water heater thereby allowing me to reduce its size.

The basement rooms are an extra bedroom, and a room that is going to become a home gym ( ahhh, finally an empty nest!) so for the most part they are heated only enough to keep stuff from freezing. Also, since there is no demand during warm months, it seems really innefficient to have a big water heater running all year to meet a demand level only seen in winter.

OK boys, what am I missing...