Success. Got first client - what to do with hosting?

1. Whats the ideal way to collect payment for hosting? Should I give her my paypal and tell her to subscribe using paypal/credit card?

Paypal or 2checkout. i've used 2checkout on recurring subs for a while and it works OK.

2. Should I make a website and act like i own a 'hosting company' too so it looks big? (not that hosting is my bread and butter but maybe it gives the more confident)?

I would. Why not? There are tons of free (or made free here) templates to grab for this. Take a half hour and $10 for the domain and call it a day. Also, you'd be surprised at the local clients you can pull from craigslist for hosting!

3. Should I go with whitelabeling my hosting and perhaps using a private DNS? How does that work?

Most good vps or reseller hosting services will let you run your own DNS servers (like ns1.yourdomain.com, ns2.yourdomain.com). Since the client isn't going to be administrating their own website you might not need to worry about it. Otherwise, it doesnt take too much time and honestly it's pretty easy so you may as well go for it.

Set up a reseller account for sure. When I originally started working with local businesses I just sent them through an affiliate link for hosting. After a couple years of that I realized that all of those customers were still paying for that same hosting account each month and I only got paid once. Plus when things went wrong (true it's not often if you recommend a good company) they always called my anyway.

So I set up my reseller account, through Hostgator, and created a package that includes hosing and maintenance. Since I usually build WP sites that maintenance is just a monthly update for WP and plugins. Anything more is hourly.

I've now been doing that a few years, working with quite a number of local hosting customers and have had have only had one customer call me at an odd hour with a problem. That was just the site being down because they had a local news interview which spiked the traffic through the roof so they needed a bandwidth upgrade which took me 5 minutes to do.

Now I only take on local small business customers who are not normally going to log into their Cpanel (most don't even have the login info because I normally handle everything for them) and mess with things that are going to cause a problem with their site. So I think that makes a big difference. I just tell them that I offer hosting and domains (I added domains later. Every cent counts) as a service and that my hosting is more expensive but that no regular hosting company will log into WP for them and update things. Also, that I'll know what to do if something goes wrong during updates so they don't have to worry about trying to do it themselves or paying me a lot more to do the work at an hourly rate.

As far as payment they get an automated invoice sent to them 2 weeks prior to the due date and transactionas are through PayPal. If anyone asks I just say that I rent a server to host sites on. This is true and they never ask who I rent it from so I don't generally mention Hostgator at all. Not that I'd hide it if anyone did but you seemed concerned about that part.

If I were you I'd just say that I've decided to offer my own hosting for better control and to more easily provide needed maintenance. Then charge 15 to 25 a month which includes a limited amount of maintenance. That's the value you add over just any other company.

So in short I'd highly recommend you host her site because webhosting has become some of the easiest money I make.

Great advice here.

Maybe even step up the hosting fees. Create a "super support" package and charge $25.

Their lack of confidence will point them to the higher package because they will think they are protected more.

OP, there's some great information here and I'm in the same boat as you. I am open and looking forward to more member responses if anyone has any. Will report my successes back after coming up with my own twists for sure.

I do this too. I charge $10 a month for hosting without support and $20 with one hour of support a month, if needed, no rollover.

For the $20, I go into each customers website and check them twice a month, then send them an e-mail telling them the maintenance that gets done.

Usually this is wordpress updates. (I use CMS commander if they have wordpress) This report keeps me in front of them two times a month so they have a perceived value from my service, and can always remember the last time they heard from me.

Either way, they call me for support anyway and i take care of it. Most go for the $20 plan, and I seldom get calls in the night.

I usually say something along the lines of "I have my own hosting service housed on Bluehosts servers so I can give my customers the personal attention i think they deserve." when describing my service.

Followed with the line "When you have a problem with my hosting you call me and I fix it. If you have your own account and have problems, you are going to have to get on the phone with support and have them help you figure out how to fix it, or pay someone like me to call them"

Couldn't he just get a vps with cpannel and a few ip's to host the websites

If she asked which hosting company that you were going to use for her website she might be a little bit more clued up than you think. A lot of clients I have had haven't asked that question and just let me take care of everything like I am the one hosting their website. I would be careful with this client, they might be keeping their knowledge close to their chest.

get a reseller account and then make money of that.