I believe the owner MUST replace your furnace and water heater if your rent payment is accepted. It is illegal not to provide hot water for sanitary reasons or heat for safety and health reasons.
The problem is whether you want to proceed and bring this up to your landlord or not. You can NOT be evicted for requesting and expecting heat and hot water. But there are ways around that issue. It may be a toss up as to whether this will result in the owner deciding to 1.) 're-purpose' the property and giving you notice to move, 2.) Selling the property out from under you since you can't swing the purchase yourself, or 3.) Fixing the unit to legal standards, possibly rising your rent to pay for the work, and continuing renting to you.
What happens if you replace the furnace and water heating at your expense and the roof starts leaking? The cold causes pipes to burst and new plumbing system is needed? There's a wiring problem that requires upgrading with a new electrical service? It's hard to say anything good about owning a "money pit" property, but not owning a 'money pit' and paying for repairs seems to me to be worse.
I really like the idea of on-demand water heating with units placed where they are needed, but once the units are installed to the building's plumbing, they become part of the property and you couldn't take them with you should you move someday. Again, you're paying for repairs that are the owner's responsibility and having no long term assurance that you can recoup your costs.
I am sure all these issues have been running through your head already so there's little reason for me to be writing all this. I feel for you and your problem. This is your business, your livelihood, your way to provide for your lifestyle and future. Internet advice is worth every penny you pay for it and so much easier to give from afar than to take to heart.
All I can do from here is pray for you (and I do), love you (and I do), and hope for only the best for you (and I do). Hugs and kisses and hugs.
