The choice is yours and yours alone(except for maybe the one who holds the purse strings)!
I work out of my home(two bedroom apartment) also and I have the tools set up in the spare bedroom along with the cat box and storage. I have it set up where I have movable carts for the large tools and move them around when I need to use them.. as to cutting it is done on a sheet of Masonite on the floor.
Things to consider if you decide to relocate expense wise are signage, insurance, rent, security services, utilities, advertising, internet, taxes, loss due to shrinkage(shop lifting, theft), trash services, phone etc.