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As long as you're not trying to have e2e encrypted group chats xmpp works flawlessly.
With that it can have some bugs in my experience.
In order of fuss, config ease, and resource requirements, it's: IRC < XMPP < Matrix
I have self-hosted Matrix for a couple of years. I eventually settled with xmpp/ejabberd/conversations. It is easier to maintain and less resource intensive, especially if you want to go the federation route.
I just use linphone with flexisip. I don't understand why SIP dropped out of this chain.
And yes, there are encrypted 1-on-1 or group chats and you can send photos and documents. As a bonus, you can connect a SIP provider to access the telephony line.
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