There are a number of variables to consider. Electric v gas, total demand, location, pipes.
For a family, like 2 adults and child, that's where I think the dividing line is, namely where if you go with tankless to go with natural gas over electric. I recently installed on in the bathroom remodel I posted about. It was electric and current draw was a consideration. There are only two adults in the house, the conventional electric heater was a long way piping wise from the bath so this just made sense. We went with electric because there was no good way to vent a gas (propane) unit. One thing we found out post install, the LED cans with dimmer flickered horribly when the heater was on. I suspect one of two things, and neither is cheap to fix. First we were on the edge of maxing out the total amps in the box. Second, the dimmers may have not be properly rectified to elimiate the flicker. The lighting was on a completely seperate circuit so my thought is that the amperage draw when on caused the issue. Since there were time constraints, the owner had me switch out the LED cans and dimmers for halogen units rather than dig to solve the problem (read cost overrun on the budget).
For a family of 2 adults plus multiple children, the demands are higher so the unit must be sized accordingly. If you go electric, make sure your service can handle it. If gas, that's not so much a problem.
Hope this helps a bit.