Voiceover demos - hiring a producer vs. DIY approach - which yields better results?

If you are just starting out in voice over (on a limited budget) and have the skills, going the DIY route should suffice.  Once you get going, a professionally-produced demo really is the way to go - especially if it is a video demo.  Expect to pay $1k or more.

Go pro.

You don't know what you don't know - meaning when YOU produce your own demo, there are things your untrained ear won't catch that a pro would recognize as amateur-hour mistakes. Examples include:

Did you compress the voice too much? Not enough? (Do you know what "compression" actually is?)

What about mixing? Did you mix each spot the same? A pro would recognize that as totally unlike the real world (where every engineer on each spot would have been different, and make different creative choices in the mix).

Did you use a noise-gate? Or noise cancelling software? Or both? Or nothing?? (and God help you if someone hears anything like an AI-sounding tool being used in there).

And that's. Just. THREE possible problems areas.

Go pro. I know it's pricey, but it's so so worth it (I started booking work within a month of finishing my pro demo!)

I think it depends on how you want to work.

Hiring a producer to do your voiceover demos is easy but also quite expensive. Every producer has their own favorite "taste". Some might like the voice sounds more base and some like it more crispy. I think the pro hiring a professional producer is you can get quality voice over demo if you select a good producer. The con is you'll need to spend quite amount of money. And thinking about your future career, if you are planning to hire the producer to do the audio editing for you in every single job just to provide the same quality as your demo, you can go with the professional audio producer. But if you are not planning to hire anyone to do the audio editing for you, I think DIY demo is a good choice.

No one is good at the first place. You might sound terrible on your first DIY demo. But you could try to learn about the audio editing process. When you learn audio editing, you will need to think like a audio producer. You will notice which part could done it better or try a different style and so on. Doing DIY demo is a good training for your voice over career in my opinion and you can provide the same quality of audio when you edit and deliver yourself.

No matter which yield you select, hire a producer to do your demos or DIY it yourself, I think the most important step is take action. For hiring producer, you could do some research on the producers you like. For DIY approach, you could start learning about how to record and edit audio. 

You do what you gotta do, but my advice is to save and get a pro demo as soon as you can.  Unless you have an amazing skill set already, a DIY demo will be terrible. A pro demo producer will charge you well into the 4-figure range, but they know how to find good copy, good music, and they can direct you, which you can't do.  All of that adds up to a demo that promises clients a world-class voiceover, if they can provide all of the stuff that producers provide.  A DIY demo just can't do it.  It may suffice, but make some money and get the good demo.  You won't regret it!

Doing the demo yourself may work at first. I started this way. But then to make a quality leap, producing the demo is definitely the best option. It will have a better sound and mix than if you do it yourself.
And in general the demo producers know what the market is asking for, which is vital to show what the clients need nowadays.

It really boils down to how you value your time and what your goals are. Since you're asking this question, it sounds like producing a voice-over demo might be outside your current skillset.
If you're eager to learn the ropes and have the time, this is a fantastic opportunity! You can become your own guinea pig, gaining valuable experience and adding a new skill to your repertoire.
However, if time is tight or learning audio production isn't your cup of tea, hiring a pro is the way to go. Just be sure to listen to their previous work to ensure their style aligns with your needs.
Personally, I started with professionally produced demos, but now I'm comfortable handling the production myself. It's definitely something you can learn over time!
 

For me, the demo is a statement of my state of the art. Just reviewing myself over the past 6 years showed me were I was and how much I have improved. It started kind of bad. People bought from me anyway because they liked my performance and voice. I did find it odd in those days how adamant they were wanting a raw recording. LOL!  One could get by with a minimum of technical effort as long as it meets the needs of the client. HOWEVER, in making a DIY demo you are showcasing your audio engineering skills, your self directorial chops, your taste in scripts, music, your mixing and mastering skills(yes, a separate art FAIAP) and your over all ability as a producer.  
Basically, you have to master the fundamentals of all aspects of production. Amateur mistakes shine like a screech on a blackboard. It's not that you couldn't learn all this. But it takes time. In the meantime, if you geta pro demo, make sure that you can deliver the basic voice over with similar quality. 

I think it depends essentially on the level of technical preparation. If the voice-over artist can't do much more than pressing records on the recording software, he will need an audio engineer who not only produces and arranges his demos and deliverables. This obviously raises the price. If, on the other hand, the voice over artist has a good technical background, he can produce everything from his home studio and deliver professional-grade products and demos while keeping the prices lower. These days that's not bad.