A method for operating a water heater appliance includes determining a temperature, Ttank, of water within a tank of the water heater appliance, a temperature, Tcold, of water at an inlet conduit of the water heater appliance and an actual position, VMPactual, of a mixing valve of the water heater appliance. The method also includes calculating a theoretical position, VMPtheoretical, of the mixing valve of the water heater appliance and establishing a lower flow rate limit for water exiting the water heater appliance and an upper flow rate limit for water exiting the water heater appliance.