Personally I do both. My VPS takes care of stuff like DNS, Email, Webhosting, and a couple of light services such as Syncplay.
I use the Control Panel called ISPconfig for DNS email webhosting and etc.
Then I have Proxmox at home behind a reverse proxy for services such as Emby, Game servers, NAS, Mumble DJ Bot.
Well I cant say specifically to your setup. But I have an old server that I use as a hypervisor running Proxmox. On it I have an OPNsense VM Ive been running for years now. I dont do any crazy pass thru stuff. I just added each NIC as a normal network device bridged to the specific hardware port. I also use it as a Reverse Proxy for all my internal service such as Emby.