It is in the best interest of the home owner to get two or three estimates from a licensed plumber. A HANDYMAN is not typically a LICENSED PLUMBER! In most states, you have to have a plumbing license, issued by the state to be a plumbing contractor. Codes are very strict as to how a water heater is installed. These codes are put in place for the home owners protection.
I served a 5 year apprenticeship in the plumbing trade and I have a lot of time and money wrapped up in my training and contractors license. A water heater carries a lot of stored potential energy. I'm sure if you look on youtube or someplace you will see what happens when a water heater explodes. I also believe mythbusters did an excerpt on this as well. When a water heater explodes, it essentially becomes a missile. Is this something you want a HANDYMAN doing? Seriously?
I've seen labor rates for mechanics at automotive dealerships at $120/hr. Yet it seems when it comes to plumbers, everyone thinks anything over $20/hr is too much. Then, they believe they shoudn't have to pay for the time it took the plumber to spend his gas, his time, use his truck to go get the water heater and materials it takes to do the job correctly?
Skilled labor is the only true resource we have left in this country. Yet, once people complain how much it cost them to have some plumbing work done, they go shop at Wal-Mart, where nearly every item is made in China!
I don't gouge customers, because I want them as repeat customers. Any advertising I do, cost me money, which is part of my overhead. (By law, I am required to post my license number on any advertising or signage.) What license does a Hanyman have? A handyman has not been trained to work on plumbing systems! When you get sick, who do you call....certainly not your handyman.
Rates for plumbers in my area are on average, $70 - $80 an hour. Expect a markup on all materials purchased or used to complete your job. Usually anywhere from 25% -50%. If a plumber disposes of your water heater, that costs them labor time and money to dispose of your old water heater properly. They just don't dump it on the side of some county road.
Don't count on the big box hardware store for quality plumbing either. Get a good plumber yourself by asking friends, phone book, etc. By doing so, if there is a problem, you know exactly who installed your unit and who you should call.
So for a water heater, this would be the bill you would get from me or any small, honest plumbing company in my area. (Central Indiana)
One technician @ 3 hrs x $75 = $225
40 Gallon water heater @ $300 x markup (35%) = $405
Miscellaneous fittings and markup = $75
Disposal of old unit $50
Your grand total from me would be $755
Labor rates and markup will vary slightly from company to company and from area to area. If you want it done cheaply, wait for Chinese plumbers to invade our country in hoardes and I'm sure you can have it done for next to nothing. When that happens, all the good plumbers in this country will shut their doors because we won't be able to compete with labor rates so cheap. If you think I'm kidding, briges are being built in California with Chinese welders as we speak....yet no one seems to care.