It depends on your fuel, your space, and how your household uses hot water.
A tank heater is the simplest swap when you already have one. It stores hot water, so it can run out during heavy use.
A gas tankless heater heats water as it flows. ENERGY STAR notes that an installer has to confirm the gas line, the power supply, and the vent route before you commit. In hard water it needs regular descaling.
A heat pump heater is electric and moves heat from the surrounding air into the tank. ENERGY STAR says it belongs in a space that stays between 40 and 90 degrees Fahrenheit with 1,000 cubic feet of air around it, so an unheated garage that freezes in winter is a poor fit.
The table on this page compares the three side by side.