My house has only one major closet.
What really stinks is that the indoor air handler takes up half of it and the water heater takes up the other half.
I have been plotting on how to free up space. I want to be able to store coats, shoes and cleaning supplies there. The indoor air handler can go when the HVAC dies. I plan to have a ductless HVAC unit in my house. The indoor air handler will then be a wall mounted unit in every room of the house. I then can free up one half of the closet. When the water heater goes I am going to choose a tankless water heater. A tankless water heater is about the size of a small suitcase and fits onto the wall. I would free up near the ceiling and the floor space. A tankless water heater works better too. You get hot water on demand. Right now when I want to shower I need to start the water and wait for it to heat up. With a tankless model. I get it right away. There is no running out of hot water either. In the winter when I want to warm up, I always have to rush so my husband gets a hot shower. A tankless model also frees up that issue. It will be expensive and require a licensed plumber to do the water heater installation. I am more than ready though. I am sick and tired of dealing with a giant water heater and all sorts of problems. It is only ten years old though. I think I am going to be stuck with it for a while.