Locate the vent on the top of the water heater. Measure out from the wall to the center of the vent and record it. Do this on two walls to help draw the hole in the ceiling.
Mark the ceiling hole center using the measurements taken in Step 1.
Place the point of the drawing compass on the mark and draw the circumference of the circle needed in order to allow the chimney to pass through the ceiling into the attic. Cut this hole with the keyhole saw. Install enough of the chimney that it protrudes into the attic.
Install enough of the chimney to mark the roof from within the attic. Mark a circle that will allow the chimney to pass through the roof.
Install all chimney parts. Install the cap by sliding its boot under the shingles to prevent rain water from entering the attic.