I have a 12 year old hot water heater that was just inspected by an inspector. My house is under contract. The inspector stated "brown water coming from faucet". There are two small rust holes on the outside of the tank near the top. It looks like it is oozing brown liquid from the holes...not much though.
Rusty water from the faucet and rust holes in a heater that age are not a good sign. If the tank has begun leaking, there is nothing you can do to prevent it. You can go to Know-how and do the external inspection described there. If that looks bad, think about a new water heater. If it looks good, then inspecting the anode rod is the final step toward determining the condition of the tank.
