Looking for opinions. Need to decide on one of these options. Cost is becoming a factor and am leaning towards the water heater...

Option 1 - Use a bradford white 40 gal to heat two zone wirsbo in bsmt (68 degrees because not planning on finishing it off for quite some time) and garage (50 degrees). Bsmt is 1100 sq ft and garage is 800.

Option 2 - Use a Buderus wall hung for above configuration with the addition of a Amtrol hot water tank for domestic.

Thoughts?