Want to free up my HVAC closet

I have no storage in my house anywhere. The bedrooms have a small closet, the bathroom has a vanity and there is one hallway closet. In an ideal world the hallway closet would be where I would hang coats, have boots and hold cleaning supplies. Unfortunately what it holds now is my indoor air handler with the HVAC and the water heater. They both take up so much space that I can only mount a broom, wedge a bucket and a mop in there. What a waste of space. I have to put a shoe rack in my entryway that looks awful. I also need to keep my winter gear in my bedroom. Cleaning supplies are just all over the place. I have started brainstorming how to open up that closet. I have decided that when the water heater dies, I am doing a tankless model. You still have a unit, but it is wall mounted and much smaller. For HVAC I am going to do a ductless option. Inside will be wall mounted indoor air handlers in every room with a thermostat. That way I can have zone control and not provide HVAC to unused rooms. I also free up more than 50% of the closet space. After those two changes I will have plenty of space to store some things. I have checked the ages on my equipment. It looks like my HVAC is 16 years old, so it will go anday now. Sadly my water heater is only 4 years old and will be in there for awhile. Getting a portion of the closet would just be nice at this point.

Space heater