Wood-burning furnaces are most often placed outdoors, saving indoor space and eliminating the possibility of indoor fires. They also effectively provide free fuel for those who own a sufficient amount of land to produce enough wood.
Outdoor furnaces also provide greater flexibility compared to indoor options. Instead of having to use a space heater or other device to heat a shed or detached garage, homeowners can instead run a separate connection to the wood furnace. Those living on large properties who might wish to add expansions may prefer this flexibility.
Fireplaces provide a convenient option, but most of the heat they generate is lost through the chimney. Wood-burning furnaces capture a significantly greater amount of the heat they generate, allowing homeowners to use less wood. It's also easier to distribute the heat generated through furnaces throughout a home, providing greater comfort.
Outdoor furnaces also present no risk of indoor air pollution if they are placed far enough away from the home. Since the combustion process happens outdoors and potentially dangerous by-products are able to disperse safely, the risk of carbon monoxide poisoning is virtually nonexistent. Wood furnaces tend to be easier to operate, so those living in rural areas might not need to rely on expert help if the system fails.