I don't like the tank less water heaters, unless you live alone and don't use hot water every day, if you use very much hot water or have regular patterns then get a tank and if you want to save money put a timer on it, LP water heaters can be timed if they have a forced exhaust fan, if you really want to save space there are some very small tank water heaters that are more or less an on demand water heater with a tank buffer.
Heating with LP and heating with electricity are both expensive and can vary depending on where you live so it's worth doing a little research and math, Natural Gas tends to be one of the cheapest, if you can get it and the heat pump water heaters are also on par with natural gas, they also dry the air so if your water heater is in a damp location it will take care of a lot of that moisture.
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