The "typical" life expectancy for a hot water tank is estimated to be about 7 to 10 years tops, and sometimes that is pushing it. Ours lasted for 14, closing in on 15. The tell tale signs for us is that it was no longer efficient in holding in the heat, and water started to leak. One winter, it just gave up on life and dumped water everywhere. It was a pretty shitty situation to be in, especially if you have kids.
Looks like you're circumstances make you a good candidate for a tankless system. They appear to be popular in new condos and town homes these days, and I have yet to know of any failures. You can be our rat lab!
