Experience is always the first thing to think of. If you have lots of experience, you should definately colo a server or lease one. You should see the ups and downs of each option. If you're new to the business, I suggest reselling as an option. This will get your hands wet enough for you to handle the day to day troubles of hosting. It will teach you how to handle customers as well as resolve problems. Although you won't be able to troubleshoot a lot of the problems, reselling for a good company is crucial. You don't want to resell for a company who is going to leave you in the dark. After you have enough customers, you can get think about colo or lease. Hope this helps.