Like choc.dog, I am set up in my house - but I have the whole ground floor dedicated, with a number of instruments, fawyer, office, desk, etc. It works very well. (We live on the second floor.)
I also teach at some students' houses. It is more comfortable teaching from my place, but if I teach elsewhere I can teach when my boys are still in bed, or that sort of thing (teenagers, you know - LOL!)
I think the most demanding part of teaching from my own place is that I have to keep the garden and the house clean and presentable - professional looking - at all times. This is quite a bit of additional work when I do everything myself (as a single parent). The best part is that I am not physically absent from my own boys when I am teaching - I don't feel like I totally abandon them, even though they don't get my attention while I teach.