Space is exactly the reason why I am building a 3 tier system. It should only take up about 3'x3' of space in a garage (which I don't have). I'm just copying a design I found online:
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You should talk to the brewers at new belgium. They will put you on a wait list for old kegs that you can turn into "keggles". Then you can brew 15 gal batches! I've done both partial mash and all grain and there are benefits to both, but both make great beer. I prefer kegging to bottling also, except that you tend to drink more beer when you can just pull the magic handle and have beer appear in your glass. My kegging "system" consists of a siphon hose and nothing more.