Hot water runs out quickly

For electric water heaters with this problem I would automatically check the lower heating element and themostat. If that wasnt the cause I would check the dip tube that extends from the cold inlet down to the bottom of the heater. Sometimes these are broken off or fell into the heater during shipping or installtion. I also have a 40 gallon electric water heater in my house and it serves us well but we only have a one bath house. For a two bath house I would install at least a 50 gallon heater especially if there are more than two people living in the residence. Lots of people turn the water temprature up when they run into this problem but all it does is increase the possibility of serious burns. It is highly recommended to set the temp no higher than 125 degrees F and that is what the manufacturers set them on.Check the condition of the lower heating element and thermostat with a continuity or ohms tester if you are familiar with them but dont forget to cut off the power first!