Thanks for all the great information everyone! It all definitely gets my mind thinking. Handling the hosting definitely seems like a double edged blade.
As others have mentioned there’s the possibility of extra income from hosting client sites. However, I’d say the main reasons to do so are:
Put new clients at ease - tell them up front they don’t have to worry about picking out a host or how that works - and many new clients do have a very big, big concern about this, as they have no clue what the various options mean (Linux/Windows, disk space, bandwidth, etc.).
Give yourself the opportunity to pick the best host for how you develop sites. You’ll want to control whether it’s a Linux/Windows server, how much disk space you think the client will need, and so forth.
Dan
If you have more than a couple of clients you would be much better served by just getting a single dedicated server and hosting there. This way you have FULL control over all your sites.