I would certainly avoid using a server registered to my real name, and most definitely would avoid hosting anything remotely illegal out of my house. Using Tor Via Tor should give the hidden service about the same anonymity as a normal Tor client, so it would be less of a horrible idea to host out of your house with such a configuration versus a standard hidden service configuration (which would be an absolutely horrible idea), but I would still avoid it. Having the hidden service registered to some fake identity and hosted out of some random data center in some random country brings a lot of security and anonymity advantage imo. I would be hesitant to even do a colocation unless I was dead sure I did not leave fingerprints or other forensic evidence on the server, but there are quite a lot of security benefits to doing colocation as well. The biggest disadvantages are that you could contaminate the server with biological information and also that you need to reveal your location by shipping the server. However you could perhaps use snail mail remailers to try and obfuscate your location somewhat. The nicest advantage that you get is the ability to be certain that your configuration is how you think it is, and to be able to set the intrusion detection system while it is in such a state (I believe these are powered by the motherboards on board battery and thus an attacker can not merely cut power to circumvent them). On the other hand you can get a lot of the same advantages with a KVM switch on a non colocated server. I believe you can get servers that have intrusion detection systems already configured in them, although I believe then you will need to trust that the server was ever properly configured in the first place. With a KVM switch you can remotely install your entire OS so you do not need to trust that the preinstalled OS from the hosting provider was not root kitted. Mainly the advantage to using colocation is simply that you can have more faith in the chassis intrusion detection system, and that you can do things like protect the memory with encapsulation material. I really would spend a lot of time thinking about the best option, and honestly I would lean more toward getting a non-colocated server with a KVM switch under a fake identity.