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Can a faulty water heater cause brown water?

When an electric or gas water heater isn’t maintained or just gets old, it can develop a sediment (rust, minerals, etc.) buildup in the bottom of the tank. When this happens, it can cause the hot water to turn a brownish color and even cause odor issues. That’s why to eliminate the hot water heater as a cause for any smell or water discoloration, it’s important to run the cold water only. If it flows clearly, it could be the water heater needs flushing.