My research thus far on the subject (I’m looking at Takagi myself) is that they generally need to be vented through the chimney via Category 3 4″ ducts (code in NYC) unless you are purchasing a direct vent model. Takagi has both direct vent and non-direct vent models. However, with a direct vent model, it is my understanding that they tend to create a lot of steam in the colder months (think of it as seeing your breath in the cold). If the vent is at a low level, you’ll wind up with clouds of “steam” at eye level rather than having any such “steam” escaping at the roof line. Takagi has a good tech line, look them up on their site, and, BTW, I’d look at getting the newer model, the TK-1S vs. the T-K2. It is lighter, and it’s GPM is a bit higher than the TK-2.
Good luck.