In my last house, I only had a 2 car garage and wanted to maximize floor space. I had a Craftsman horizontal tank 3 HP compressor that I put up in the attic. I ran hard lines with quick disconnect fittings within reach.
SC is right...every time the damned thing came on, it vibrated the dust and ants off of the roof trusses and spread dirt all over the place. I got to where each time I painted a car, I'd have to put up visqueen/plastic sheeting on the underside of the trusses to contain the dust.
If you have floor space, a corner of the building works well. I suspect that they would need some ventilation though to cool off. I've seen outdoor sheds with vent screens in them.
