As long as the people using your home server aren't messaging people or chatting in rooms from other home servers (aka you've disabled federation) and you can trust your cloud provider not to snoop around, yea, it's a fairly decent solution. Even with disk encryption like LUKS or your file system's built-in encryption, if your cloud provider wanted, they could just dump the memory of your VM and find the password/encryption keys that way.
You would be surprised, especially the ones in the five eyes countries or whatever.