Might be wise to move it- but don't go to electric unless you like to pay ALOT of $$ to heat your water!!! I have one and am considering switching to propane as I don't have gas service.

I personally don't like to see water heaters installed above another occupied living space but it is sometimes neccesary in some circumstances. An inexpensive solution to this possible problem is to have a drain pan installed under the water heater that will drain the water away to a safe area in the event of a leak. This of courae will not protect the lower part of the dwelling if a severe rupture would happen to occur. As far as switching to electric, this would make the move easier if this is what you really need to feel safe. But, the cost increase to heat the water may outweigh the savings that you would have using gas.

The cheapest and easiest thing to do is to place the water heater in a pan that will catch leaks. They are good for washing machines and water heaters.
Moving it downstairs would reduce the damage from a leak, but not prevent it. A pan would prevent the damage.
Severe ruptures are rare, but leaks through the pressure release valve are common, especially if you have hard water. And eventually, the tank may fail and start to leak.
(For that reason only, I'm glad my water heater is in my crawl space.)

[This message has been edited by rpxlpx (edited January 30, 2003).]