Just a note on 2.: If your onetime price is equal to just 6 month subscription time, you're going to lose money. Either you're lowballing your onetime payment, or making a subscription too costly.
Consider a case where you offer both at the same time:
Unless the costs associated with self-hosting are incredibly high, very few people would choose the SaaS option if they can save 6 months of budget on the first year. In this case, I would increase your price to at least a year of SaaS subscription.
As to your original question: Unless your software is special in some way that you don't want anyone to find out about, you can offer both SaaS and self-hosting at the same time. My advice would be to do that, but use a yearly-license model for the self-hosting. Calculate the costs a self-hosted version would cost in total to a client (license, hardware, maintenance etc.), and make the SaaS version slightly cheaper than that.
As to your original question: Unless your software is special in some way that you don't want anyone to find out about, you can offer both SaaS and self-hosting at the same time. My advice would be to do that, but use a yearly-license model for the self-hosting. Calculate the costs a self-hosted version would cost in total to a client (license, hardware, maintenance etc.), and make the SaaS version slightly cheaper than that.