I have a recirculation pump on my tank type gas water heater because my house is pretty spread out with the master bath as far away as possible from the water heater. My circulation pump is located in the bathroom and pushes the water back towards the water heater via the cold water line. It shuts off automatically when the water at the pump reaches 95F or so. It also has a timer that allows you to limit the hours it runs. With a tankless water heater, this type of recirculation pump defeats the savings of a tankless because it will cause the water heater to cycle up everytime the pump starts automatically circulating the water. With tankless you want the recirculation pump to be on a switch and you hit the button to start it when you want hot water, let it run for a minute or two to get the water hot up to the tap and then it would be shut off. Here in NC, they will mount gas powered tankless water heaters in garages, attics, crawlspaces, and even on the outside walls. We just installed an outdoor unit at our church to support two bathrooms with showers and a washing machine. If it was just hand washing we probably would have used a small on-demand unit. Given the showers, we would have needed a large tank, for the rare occasion when the showers would be used. In our case, a gas tankless made the most sense. We also installed a new gas tankless in the commercial kitchen on the other end of the building.