A system and method for configuring a water heater to drain condensate from combustion products is provided. The water heater comprises a water tank, a burner for producing combustion products, a flue extending through an interior of the water tank to receive the combustion products, and an exhaust passageway positioned downstream of the flue and extending outside of the water tank to exhaust the combustion products. The exhaust passageway includes a first portion and a second portion positioned at an elevation above the first portion. A bypass conduit is coupled to the exhaust passageway and positioned to direct condensate in the exhaust passageway from the second portion toward the first portion. A drain port is positioned at or an elevation below the first portion of the exhaust passageway to drain condensate from the exhaust passageway.