I have a similar situation with my master bath about 60 feet from the water heater. I am considering putting a small hot water tank in the basement right under the bathroom, but am not sure if it is practical. Water cost is not an issue being on a well. The question is is saving a 2 -3 minute wait worth the price of the heater and cost to operate it? As far as water supply to the small heater is concerened, it seems that the hot line would be better because there is less temperature rise needed and if you deplete the small tank supply, you will still get hot water from the main on demand heater. Good luck!

These are typically very different situations. Kitchen use is typically smaller amounts at-a-time. Even dishwashers -- the newer ones -- don't use very much water. Master bath use is typically greater quantities -- like showers you don't want to get cold in the middle of.

However, seems to me a recirculation device would likely be most cost effective and convenient solution for both applications.

I think in your case, supply line hot would be the only option. For us, the old water heater was in the kitchen so we just transfered the wait time from the kitchen to the bathroom. We're having a tough time changing our water use habits. Prior to the new on-demand, turning on the shower and waiting seemed part of the routine. For handwashing after a potty stop, you knew to turn on the water when you entered! Now, in the kitchen the wait seems so long. A quick rince of dishes or a handwash doesn't seem worth the wait so everything but washing dishes is in cold water. I'm trying to figure out if the few times we need unlimited hot water (hot supply line) is worth paying for heating a small amount of hot water to sit in the pipes each time you use less than 3 gallons in the kitchen. I'm really leaning towards the cold supply line and seeing if 6 gallons will meet our needs. A dishwasher, which we do NOT currently own, uses 5-6. I've heard that hand washing wastes more water but I need to actually measure. Then the consideration is the cost. We thought we were going to heat water with gas and now are considering electric for the kitchen.

I'll post what we finally decide to do.