The first response given to someone new to RMH and wanting to heat water with one is "BOOM-SQUISH", that being the sound of the water supply exploding due to a sudden pressure change, and your body absorbing the brunt of the force. Like, "wasn't there a cabin out here last week?" kind of force.
There's a 4 DVD set sold on this site that includes one specifically on water heating, and you might be able to buy that one solo too. Check the digital market button on the side for that info.
You need the J tube to be accessible to
feed it wood and clean it so keeping it in the main space would be wise, along with the barrel. It also needs to be insulated to improve burn performance, and the barrel/bell needs to give off sufficient heat for draft. If you can place the RMH on the side which is closer to the soil, you could install additional supports under the mass to brace it to avoid any chance of the floor sagging. A 20x30 space is plenty of room for one.
What is the plan for the heated water? Taking a
shower, cooking, etc? Keeping a tank full of water hot enough 24/7 for on-demand hot water, and too hot for legionella to grow, might be a hassle. Pressurized hot water heated with a variable heat input like wood fire, can be dangerous. But if you just need hot water now and then a bypass to prevent heat storage in the bench when it's warm, and heating a pot on the barrel could work, or having a rocket stove or pocket rocket located outside the cabin could work too. Heat water indoors in the winter, and outdoors in the summer. I've seen several folks who built a summer kitchen outside to keep heat out of the house.