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I've got a server that I use only for my clients and then I charge them a discounted annual rate.
But, sometimes they've already got a solution so I'll use that or sometimes, if they're a bigger client, then my server won't handle their site so I help them to find a dedicated solution.
For the smaller clients I lease a Virtual Dedicated server from http://www.webmasters.com
It's 100 bucks a month plus however many IPs you need. Very cheap, very good and you can put like 100 domains on it.