Best Hardware for Your First Homelab (Budget to Overkill)

A few weeks back, someone posted their "$130 baby homelab" on r/homelab and it absolutely blew up. Nearly 3,000 upvotes. Why? Because it proved something a lot of us already knew: you don't need to spend thousands to get started.

But here's the thing. The homelab hardware landscape is confusing as hell for beginners. Should you buy a mini PC? Grab an old Dell from eBay? Build something custom? The answer depends on what you want to run and how much you're willing to spend on electricity.

I've been through this journey myself, starting with a dusty laptop and eventually building something a bit more serious. Let me break down the options tier by tier so you can figure out what makes sense for you.

Tier 0: That Old PC Collecting Dust (Free to $50)

Here's the best advice nobody wants to hear: your first homelab server should probably be something you already own.

Got an old laptop from 2015? Perfect. A desktop PC sitting in the closet? Even better. That machine you were about to throw out or sell for 50 quid is genuinely capable of running:

Pi-hole for ad blocking
A dozen Docker containers
Plex or Jellyfin for media streaming
Home Assistant for smart home stuff
Basic file sharing and backups

Seriously. An Intel i5 from 2015 still has plenty of juice for learning. Install Docker, spin up some containers, break things, fix them. That's the whole point of a homelab.

The only real requirement? At least 8GB of RAM. If your old machine has 4GB, you'll hit walls fast. RAM is usually the first bottleneck, not CPU.

Laptops have one killer advantage: built-in battery backup. Power blips won't corrupt your drives or interrupt your services. Plus they're designed to run 24/7 without sounding like a jet engine.

Tier 1: The Mini PC Revolution ($150 to $300)

If you're buying something new specifically for homelabbing, mini PCs are where it's at right now. The Intel N100 processor changed everything when it launched in 2023, and it's still the sweet spot for most beginners.

Why the N100 is so popular

The N100 is a 4-core, 4-thread chip that:

Idles at around 6 watts (your electricity bill won't notice)
Maxes out at maybe 15 watts under heavy load
Has Intel Quick Sync for hardware video transcoding
Performs roughly like a 6th gen Core i5
Runs completely silent in most mini PCs

For context, one r/homelab user reported running their N100 machine with multiple containers at about 3 watts idle. That's pennies per month in electricity.

The Beelink Mini S12 Pro is probably the most recommended N100 mini PC in the community. Around €180 gets you the N100, 16GB RAM, and a 500GB SSD. Plug it in, install Proxmox or your Linux distro of choice, and you're running.

Other solid N100 options include machines from CWWK, Trigkey, and GMKtec. They're all using the same Intel chip, so performance is nearly identical. The differences come down to port selection, build quality, and whether you want dual NICs (useful for running a firewall).

N100 vs N305: when to step up

The N305 is the N100's bigger brother. Same architecture, but 8 cores instead of 4. Real-world testing shows it delivers nearly double the performance while using about 15 watts under load.

You'd want an N305 if you're planning to:

Run Immich for photo management with heavy AI processing
Transcode multiple video streams simultaneously
Host more demanding applications
Run several VMs instead of just containers

The CWWK X86-P5 is a popular N305 choice. It runs about €250 for the barebones unit (add your own RAM and storage), but you get dual 2.5G ethernet and four NVMe slots. Overkill for beginners, but nice to grow into.

The RAM situation

Here's something to watch: most N100 mini PCs top out at 16GB RAM (some claim 32GB support, but results vary). For pure Docker workloads, 16GB is actually plenty. People run 30+ containers on that without issues.

But if you want to run proper VMs through Proxmox, RAM becomes the limiting factor fast. A single Windows VM will happily eat 8GB. Add a couple Linux VMs and you're maxed out.

If VMs are your goal, consider the AMD Ryzen 5825U class of mini PCs instead. 8 cores, 16 threads, and support for up to 64GB of RAM. More expensive (€300-400), but way more headroom.

Tier 2: Used Enterprise Hardware ($50 to $200)

Used office equipment is stupidly cheap right now. Businesses are dumping perfectly good computers because of Windows 10 end of life, and that's great news for homelabbers.

The Dell Optiplex strategy

Dell Optiplex machines show up constantly on eBay and local marketplaces. One r/homelab member recently scored 12 Dell Optiplex 9020s for free because a company was just trying to get rid of them.

Here's a rough pricing guide for refurbished Optiplexes:

Optiplex 7040/5040 (6th gen i5): €50-80
Optiplex 7060/5060 (8th gen i5): €100-150
Optiplex 7070/7080 (9th/10th gen): €150-250

The sweet spot right now is probably the 7060 or 7070 generation. Recent enough to have decent specs, old enough to be cheap.

HP EliteDesk and Lenovo ThinkCentre are equally good alternatives. Same corporate roots, same fire-sale pricing. The HP EliteDesk 800 G3/G4 gets mentioned a lot as a solid choice.

Why go enterprise?

These machines were built to run 24/7 in office environments. The build quality is solid, parts are standardized and replaceable, and you can usually upgrade RAM and storage easily.

The SFF (Small Form Factor) variants are particularly nice. Compact enough to tuck on a shelf, but they still have room for an extra drive bay and a low-profile PCIe card.

The Micro variants (like Optiplex x070 Micro) are even smaller but sacrifice expandability. Great if space is tight.

The downside of older gear

6th and 7th gen Intel chips were power hungry by today's standards. An i5-6500 idles at maybe 25-30 watts, compared to 6 watts for an N100. Over a year of 24/7 operation, that adds up.

Quick math: 20 extra watts running constantly = about €35-50 per year in electricity (depending on your rates). Not a dealbreaker, but worth considering if you're optimizing for running costs.

Tier 3: Dedicated Server Hardware ($200 to $600)

Once you outgrow a single mini PC, you have two paths: cluster multiple cheap boxes together, or get something beefier.

The DIY NAS/Server build

Building a custom server lets you pick exactly what you need. A popular approach in 2025:

Intel N100/N305 or AMD Ryzen 5 motherboard
32-64GB RAM
Multiple SATA/NVMe slots for storage
A proper case with room for drives

This route costs more upfront than a used Optiplex, but you get exactly what you want. The Jonsbo N2/N3 cases are popular for compact NAS builds that look decent in a living room.

What about actual servers?

Rack servers (Dell PowerEdge, HP ProLiant) are incredibly cheap used. You can find a PowerEdge R720 with dual Xeons for €150-200. Sounds amazing until you consider:

Power consumption: 100-200+ watts idle
Noise: designed for data centers, not bedrooms
Size: need a rack or dedicated space
Heat: they put out a lot of it

Enterprise servers make sense if you need massive RAM (hundreds of gigs), tons of drive bays, or serious redundancy. For learning and typical self-hosting? Usually overkill in the worst ways.

The exception: tower servers like the Dell T620 or HP ML350 are more apartment-friendly. Still loud and power-hungry, but at least they don't need a rack.

Tier 4: Overkill Builds ($600+)

At some point, homelabbing becomes a hobby unto itself. You're not just running services; you're building infrastructure for fun.

Multi-node clusters

Instead of one big server, some people run clusters of mini PCs. Three N100 boxes running a Proxmox cluster gives you high availability without any single point of failure. Plus, it's just cool.

Total cost: maybe €500-600 for three Beelink-style machines. Power draw stays reasonable because you're using efficient hardware.

High-performance builds

If you're doing serious work (not just learning), consider:

AMD Ryzen 9 or Threadripper builds: Massive core counts for virtualization
Intel Xeon workstations: ECC RAM support for data integrity
GPU passthrough setups: For AI/ML workloads or gaming VMs

These builds can easily hit €1500+ and consume serious power. Fun to build, expensive to run.

Storage: The Often-Forgotten Budget Killer

Here's where people underestimate costs. The server is just the start. Storage adds up fast.

What you actually need

For a basic homelab running Docker containers:

256GB-500GB SSD for the OS and containers
That's literally it to start

If you're running Plex, Nextcloud, or any kind of media server:

Boot drive: 256GB SSD
Storage: as many terabytes as you can afford

Used enterprise HDDs (4TB-8TB) from server pulls go for €30-50 on r/homelabsales. Not the newest drives, but perfectly functional for media storage.

SSD vs HDD

SSDs for anything that needs speed: OS, databases, containers. HDDs for bulk storage where capacity matters more than speed: media, backups, archives.

A Samsung 870 EVO 500GB runs about €50 and is extremely reliable for a boot drive. For NVMe, the Kingston NV2 1TB offers good value around €70.

The Cloud Alternative: When Hardware Doesn't Make Sense

I know this is a hardware guide, but I'd be lying if I said physical hardware is always the answer.

A basic VPS from Hetzner costs about €4-5/month. For that you get:

Always-on without worrying about your home internet
Public IP address without NAT headaches
No electricity costs on your end
No hardware to maintain

I actually recommend starting with a cheap VPS to learn Docker and self-hosting basics before investing in hardware. Check out our VPS setup guide if that sounds appealing.

Once you know what you actually want to run, you can make a smarter hardware purchase. Or you might realize cloud works fine for your needs.

My Recommendations by Use Case

Let me make this simple:

Just want to learn? Use whatever old PC you have. Seriously. Don't spend money yet.

Running Pi-hole, Home Assistant, and light Docker stuff? Intel N100 mini PC. The Beelink Mini S12 Pro is a safe choice.

Want to run Plex with transcoding + NAS storage? N100 mini PC + external USB drive enclosure to start. Upgrade to a proper NAS later if needed.

Planning to run multiple VMs? Used Optiplex 7060/7070 with 32GB RAM, or a Ryzen-based mini PC if budget allows.

Building a serious home server? Custom build with N305 or Ryzen 5, 32-64GB RAM, multiple drive bays.

Final Thoughts

The best homelab hardware is the hardware that gets you actually doing stuff. A €150 N100 box running Proxmox will teach you more than a €1500 setup that sits in a box because you're waiting for "the right time" to set it up.

Start small. Start cheap. Start now. You can always upgrade later when you actually know what you need.

And remember: half the fun of homelabbing is the constant tinkering and upgrading. Nobody's first setup is their last.