Pipe threads cut thru Teflon tape without problems unless you use stupid amounts.
Few home owners seem to have a clue there's an anode in their tanks at home. "Anode? What's that?" Don't be
that guy. At least drain a few gallons and see what's collecting in the bottom. If it's rust color your tank may be on its last legs. Unless you personally checked and changed the anode there you can bet it's never been touched. See the video I posted earlier in this thread. Getting the anode out can be a challenge, note he's using an extension on the breaker bar! Finding just a thin wire inside as I did this spring in our new-to-us house will be a shock. I wrote the anode change date right on the water heater with black magic marker.
No way I'd put a water heater other than in the basement or garage. Years ago I was third owner of a home and the entire bottom of the 20 year old water heater blew out and put water all over my basement floor. A few years later the drain valve blew out of the side of the tank on the replacement heater! I heard that "water is running" sound that's usually just a toilet in the middle of the night both times. Both resulted in cold showers that day. "Anode? What's that?"
Yep, I was that guy.
-- Chuck