A water heater adapted to be positioned outside of a building and to interface with the plumbing system of the building. The water heater includes a water storage tank adapted to store water outside of the building, a means for heating the water in the tank, a base member supporting the tank outside of the building, and a plurality of water pipes communicating with the water tank. The water heater also includes a manifold that is mounted to the base member and includes a plurality of pipe unions adapted to interface between the plumbing system and the plurality of pipes to provide cold water to the tank and to remove heated water from the tank for use in the building.