You need to check the pilot of the water heater. If the pilot does not work even though the gas is on, you need to change thermo coupler. The pilot light should be always on and it lets the burner fire on. This pilot light is maintained by the thermo coupler. If the end of the thermo coupler (placed just near by pilot tip like rectangular picture in the right side picture) is worn out by using long time, pilot light will be off and burner can’t get the fire. So water heater can’t make hot water. You can get hot water again by changing the thermo coupler

Normally many people are installing the water heater at the garage. But sometimes, you need to install it inside of the house. If you have to install it inside of the house, you have to consider of sufficient amount of fresh air. Code requires two cubic feet of O2 to one cubic feet of gas. If the capacity of gas water heater is 50,000BTU, need 2,500 cu ft of fresh air. As you see in the picture, Code is requiring two of 100 sq. In. Net opening space for 40.000 BTU water heater. Also these open spaces should be within 12” from the top and the bottom. So if you install 40 gallons gas water heater at confined space, you need at least two of 125 sq. In. Net open space within 12” at the top and the bottom.