Water heater leaks are a common finding during home inspections and can range from minor drips at valve connections to catastrophic tank failures that flood entire rooms. A leaking water heater represents both a water damage risk and, in the case of gas-fired units, a potential safety hazard. Most residential water heaters have a lifespan of 8 to 12 years, and as they age, internal corrosion, sediment buildup, and component wear make leaks increasingly likely. Understanding where leaks originate, what causes them, and when repair versus replacement is the right choice can help homeowners reduce the risk of costly water damage and support continuous hot water service. Water heaters store 40 to 80 gallons of hot water under pressure, meaning a tank failure can release a large volume of water quickly, causing significant damage to flooring, walls, stored items, and building structure. Gas water heaters add the concern of combustion gas venting and gas line connections. This guide covers the most common water heater leak causes, how inspectors evaluate water heater conditions, and practical guidance for homeowners facing this common issue.