Long Hot Water Draw offs
The hot water cylinder location is very important. You do not want long legs where it takes a long time before you get hot water. If you have several litres of water contained in your water pipe from the tank to the outlet the tank has to heat up this water even if you have just used a cup full. Eg if the pipe quantity is 4 litres and you draw off 100mills you are reheating 4.1 litres.
Current regulations prohibit long draw offs. 2 litres is the max but make it as short as possible.
Noise
Some hot water heaters make a noise either a fan or a valve opening clunk sound could be enough to not be ok.
If you have sound recording equipment then put the water heater somewhere else.
Servicing of hot water heaters
Servicing the water heater is important specially for gas water heaters which suck in a lot of air for combustion and dirt in the air with it. Things like filters need cleaning so put the water heater in an accessible location. The tank must be installed so that the element and thermostat is easy to replace specially after hours.
Dust in the Air
Some water heaters have a fan or air intakes. Do not put these water heaters in dusty locations.
Air Intakes
Some water heaters need air for cooling or heating. Heat pump water heaters have rules about distance off the wall or distance from the water heater to a front object or wall.
Some gas appliances are like this too not just for flue but other things too like efficiency.
Hot water heaters in bathrooms.
Gas water heaters in bathrooms must ventilate into the bathroom. They must be closed off from the bathroom. Usually a screw on panel.
Replacement
There are regulatory requirements that the water heater must be located so that it can be replaced with out demolishing structural things like walls.
A door frame is ok to remove, but there will be reinstatement which can be expensive. Some water heaters have wooden covers, and panels to hide them which all adds to the cost of later replacement.
Installation issues
Somewhere where it can be strapped and secured against earthquake.
If the cylinder is very heavy getting it to its location could be a problem. Be realistic.
Some tanks are hundreds of kilos so lifting high up can take lot of man power. And when it fails someone has to get up there.