The only reason to get one is if you don't have space for a tank.
The efficiency difference is small. If you don't descale it every 6 months or yearly, you lose all the efficiency gains. They don't work when you lose power. If a part needs to be replaced, it may take over a week to get. If you live in a very cold climate and power goes out for an extended period of time, it may freeze. With a tank water heater, you have an emergency supply of water...
With the Rheem that I had, the flame sensors would get soot on them so it would error out and lock up. I would have to take the whole burner assembly apart every 2 months to clean. Only reason I replaced it with another tankless was because I had al ready repurposed where the tank used to be.
Was thinking about a tankless for my vacation rental. Thought better of it since I would lose thousands of dollars if it went out before a rental. Plus in the case of my vacation rental, the water heater is inside the house anyway so the heat lost from the tank just heated up the house anyway.
I went Noritz for my second tankless after talking to a repair place when I was having problems with my Rheem. They suggested the Noritz.
BTW, that 35K BTU heater you have in there now is tiny. If you do decide to go up to a bigger tankless unit, make sure your gas line is big enough to support it. My house was also on propane. The line going from the tank to the house was 1 1/2" and I was able to tap off of it. If you have a 3/4" line for a good part of your distance, getting a 90K BTU one might be a problem. Ignore this if you are using an electric version.
