I usually hang them, unless I have a self employed painter. Sometimes I'll have a Sim who paints the same design over and over again, like the Large painting with the unhappy stick figure guy, and then I'll seen the duplicates. Or occasionally I'll get one that I simply don't like, then I sell it.
Sometimes I'll have an elder take up painting just because once they pass on their paintings are worth more. It's a good retirement hobby in that regard.