There are a lot of pros and cons to your question. I grew up in a 1900's farm house and Dad took out the Ashley would stove for fear of burning the house down. We froze using propane heat until years later he bought a home-made outside wood burner. It was a 500 gallon diesel barrel with a large propane tank welded in the center for the firebox. One end of the propane tank was cut out and a disc and lever were fitted as the door. Needless to say, this thing was a beast to feed. I spent a lot of time cutting wood and Dad spent a lot of time tending the fire. The outdoor furnace sounds good, (chips, dust, ash, coals, embers, & smoke outside), until it's 10pm, zero degrees, 20mph wind, and it needs fed. They tend to smoke more than an inside stove because you can't keep the flue hot enough. More smoke means more creosote build up, more cleaning. Will your insurance company allow you to have a wood stove? I have seen a lot of used stoves for 1/2 price of new. Watch your local papers, craigslist, etc. Most of the stoves I have seen on there look like new and I would definitely go the second had route. If you get an inside stove, stay away from catalytic models. Use a liner in your chimney and insulate it, assuming your venting by chimney. Get one with air tubes on top of the firebox that shoot air on the fire and glass door. "Secondary Air that is preheated to ignite unburned gases in the firebox." Get a good name brand such as Quadrafire, Hampton, Regency, Lopi, Jotul, Buck, Harmon, Hearthstone. Mine is 77% efficient. There are a lot of good stoves out there.