I'd make sure the local codes say it is OK..some towns have stupid codes,others don't..
My dad wanted to add a water heater to the garage so the space it hogged in the laundry room could be gotten back..but the building inspector said "That wouldn't be practical--your garage is by code required to be sheet rocked and plastered over,to maintain the fire code specs--and you'll have to do some demo to get the pipes and power out there to it--and being next to the outside wall,there is a possibility the pipes could freeze if it gets cold enough ,behing the north side"....so my dad decided not to move it,and just deleted it and used the furnace's tankless heater after the water heater finally began weeping years later..
20 years ago our 330 gallon underground oil tank reached its 23rd birthday and my dad worried it may be getting ready to rust and leak and contaminate the soil in front of the house...rather than have it dug up,the town building inspector said it was "not really a must to dig it out if it had never leaked,and you can just have it pumped dry and filled with some speedi-dri"--if you went to remove it ,you had to hire a licensed contractor..get a permit..($2000 for R&R the tank alone!)..
The oil furnace was also as old as the tank and developed a crack in the boiler,so we decided to have both replaced at the same time by the same contractor in 2000...he said the best place for the new 275 gallon tank was in the attached garage,which is directly under a bedroom..since the garage was only 13 x 21 feet and never used to park a vehicle in,my dad saw no reason not to put the tank along the inside wall of the garage,close to the overhead door opening..
After the new tank & furnace was installed and up and running,the building inspector was called to come "sign off" on the job,and right away he looked shocked to see the oil tank in the garage--he said "I was not aware this was where you wanted to put it--I assumed it was going to be an outside above ground tank !--a car pulling in here could hit the tank and cause a disaster--it should have concrete filled bollards in front of it if it is to remain here !".
The contractor then argued with him several minutes and told him "they never use the garage for a vehicle"--the inspector says "well,who is to say the house may not get sold--the next owner(s) may want to park in the garage!"..
Finally the inspector looked the place over ,and said "well,judging by the 90 degree angle the garage entrance is to the driveway,it'd be difficult to park anything larger than a compact car in here",so he relented ,he also complained the guy just ran copper tubing from the tank to the furnace in the next room without "placing it against the wall and cementing over it"--he had used flexible counduit instead as a "protector"...he was not pleased with the way it was done,but signed off on the job anyways..
Now that tank is 20 years old and so is the furnace...I fear it'll be a real hassle to get a new tank put in,in the same location..insurance companies here won't insure a home after the oil tank reaches a certain age,I think (hope) its 30 years here in MA..they are getting anal about wood stoves too,several friends I know removed theirs after being told having one would raise their insurance bill close to $1000..not sure about pellet stoves ..they also wont insure a home if the roof is over 20 years old..