I've self hosted for a good 2 years now, and have dealt with other people's paid servers, too.
Basically Magiddo said it all.
I ran a really successful (by my standards) community with just a simple 8-10 slot server, we had around 100 members on our steam group, and the server had a good number of people in it daily.
If you have the spare equipment, I'd suggest using it, hosting your own smaller scale server, and if it grows enough, consider moving to a paid server.
Also, as a note, to have a successful server, its not all about the custom scripting. I notice a lot of people are all about that lately. I'd argue that it's more about mature, friendly, but stern admins. Admins are the ones who will transform your community into something great, or something terrible.