Used hot water heaters can be safe if they're transported and installed correctly, but damage to the tank can cause problems later. It is important to ensure that safety features are functioning correctly.
Hot water heater tanks are under a considerable amount of pressure. Small dents and other forms of minor damage can cause the tank to become damaged while it is being transported, and this damage can cause small cracks to form. Over time, these cracks can grow, potentially leading to catastrophic failure.
To ensure that the tank doesn't encounter pressures higher than intended, water heaters have a pressure relief valve. These valves are mechanical, which means they should trigger automatically. Over time, however, rust and sediment buildup can block the pressure relief valve, potentially allowing the system to build up more pressure than it can handle. Bumps encountered while moving the unit can also damage the valve, which can cause it to not function.
Before purchasing a used water heater, it's important to note that they typically have limited life spans. While heaters that are cared for typically last a bit longer than neglected units, purchasing used units is likely to result in more frequent replacements. In addition, newer models tend to offer better efficiency, leading to monthly savings on electricity or gas bills.