While a sump is most ideal and will provide you with more volume and flexibility, going with a hang-on-bank setup is fine as well.
You really have to options with this if you convert:
- Clear and clean the tank & drill it
- Go HOB
- Convert tank to an all-in-one using an all-in-one conversion kit
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I would say options #2 and #3 will be cheapest for you. If you chose this route - your main filtration is going to be a quality Hang on back skimmer like a Reef Octopus 1000 HOB or AquaMax HOB. With a tank that is only 3 feet long, I'm guessing your volume classifies it as a nano tank (40 gallons and under). Nanos are a bit tougher to keep because parameters are less stable - especially temperature and saliny. Going with a easy to care setup with softies and small easy to care for fish like Azure damsels (since you mentioned you like them - this is one of least aggressive ones), clownfish, basslets, etc will make things a lot easier for you in the long run. You can still use your canister filters as a media reactor + additional flow in the tank.
Your biggest expenses are going to be your protein skimmer & lighting. You will save a ton on lighting if you stick to low light corals. Don't bother with live rock - just buy high quality dry rock - it will cut your rockwork cost in half. Buy your corals from local reefers or at frag swaps to save yourself some money. Also get a small sample of live rock from a local reefer to seed your coralline algae once you cycle your tank.
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