I use all kinds of tanks for various things.
First be warned the tank could still be a bit dangerous. I don't really know if liquid propane is as bad as gasolene or not for getting into the pores of the metal and the seams. Take a gasolene tank, flush it out many times, start cutting with a torch and get a big BOOM from the fumes that never quit comming out. Seen people fill a gasolene tank full of water also and still go boom, probably a little air pocket in there that still has fumes. Of course you may not be planning to use a torch on it, but saws and drills can spark and set things off too. If your cutting it, are you welding it later??
So I would double check the saftey of how you plan to work with it just in case.
As for using those tanks, they should work for awhile. Yes, I am sure they will rust out, but if in decent shape it should take years perhaps. Air compressor tanks rust out holes from the inside just being used as air tanks, from the moisture in the air turning to water, then people don't drain them half the time so they rust out.
I've cut open old well bladder tanks, yes the tops were even rusty inside. Most recent one when I cleaned it up inside after removing the bladder, I was getting a rusty mud as I scrubbed it a bit. This one will be a heat storage unit. I cut it open cleaned it, removed the bladder, put in a copper tubbing coil, welded it back together, sealed around the tubbing with JB Weld. Have not installed it in the Van yet. Purpose of this one is to hold 20gal hot water, the tubing connects to the heater hoses for the rear heater in the van already. So when I drive the hot coolent will flow through the copper tube inside the tank and heat the water in the tank. When I stop to take a nap in the back of the van I got 20gal hot water radiating heat to keep the rear of the van warm longer. It will already be warm because of the rear heater running while driving, tank is just to keep it warm after heater is turned off.
I did not want to put 20Gal coolant into the tank though, that would have been easier I guess. Anyway that tank was made for water wells, and it was rusty inside.
I also made one nearly the same to use as part of a still when I get my alcohol fuel permit, it also was rusty and muddish like when I cleaned it out. The mud is the surface rust being washed and scrubbed loose.
Even galvanized tanks I get alot of are rusted from the inside out. Many are also from water wells or storage. I find a little pinhole leak in one near a small brownish area, poke around it a little with a screwdriver or such and I find a bigger hole comming out from inside. The other day I wanted a fitting from a rusty tank, metal looked fine on the tank where the female fitting was welded on, but when I tried to turn the fitting I wanted out the side of the tank ripped out, rusted inside. I knew that one was bad, but lots of good fittings on it, so I brought it home anyway.
If you have a good tank to begin with it should last for years, but eventually it will rust out when used for water. For anything like heating water then I normally would use an old hot water tank, if you can. They have a liner in them, some kind of coating, not sure exactly what it is, I knew once, but they don't rust out nearly as fast as any other steel type tanks. Most I have found if they rusted, it was from the outside which is not coated the same way. I get hot water tanks free or up to $3 often from scrap yards or people just throwing them away, wanting them hauled off anyway. Most the time I get about $5-$10 of used copper or brass fittings on them also, then I don't have to buy those later. If you can, I recomend you look for those.
Normally the only thing wrong with such tanks I get are they are full of sediment, if your cutting them open anyway it's very easy to get out, if not cutting them then a little time flushing them, poking around with a stick, a bit of shaking, and the sediment eventaully washes out. I used alot of these and clean them that way. Before we got a well, I carried 4 30gal or larger water tanks in the back of a truck and filled up at various places to bring home. All scrap yard or throw away tanks, no leaks, just needed cleaned out.
What are you using the water for, if just heating the house not important, but if it is hot water for people use, beware if you paint the inside of the tanks what you use, and I would not like rusty tanks either myself for bathing or drinking.
Also along the idea hot water tanks don't rust out very fast if at all. About 7 years ago or longer I had some animals I needed feeders and waterers for. I cut several hot water tanks in half, they are still in the yard and woods, no rust sitting outdoors cut in half many years now.