That's a nice room in the making. What are you going to put on the walls?
BTW, those Titan tankless water heaters are new, made in China and I'm going to buy one and try it out at the fishing camp. A couple of other people have already purchased them although I don't know how durable they are. You should be concerned with the size of your house and the heated water needs that you have. Titan makes a couple of different types of water heaters as do many other manufacturers. The prices vary GREATLY and it seems that there is a lot of sales spin put on the savings that can be obtained. You could easily move the water heater outside and attache a water closet to the back of your house (metal shed) enclosing the water heater. Here in Louisiana it is VERY common to have a metal water closet attached to the back of your house. Not a lot of heat loss and you can always wrap them if you choose.
I'm going with the Titan because it is cheap and the fishing camp won't be used regularly like a traditional house.
$Bill, how long have you had the Titan tankless water heater?
JoeyA