How to build a homelab and why you might want to think about doing it

Yarr. Set sail the seven seas.

Sorry I have no idea why the article opened with that at all. Must be an unrelated typo in my word processing software or something and I can’t seem to remove it so let’s leave it there. A couple of years ago I built a home server. Affectionately they’re called, in the community of people that do this, a homelab.

I just had a feeling it would all be so useful that I would end up building multiple servers. I named my first one Melee after Monkey Island, a game I loved growing up, because the game has multiple islands and I knew there’d be a Scabb Island server and a Booty Island server at some stage too. And sure enough I’m getting pretty damn close to it. But with ever-increasing subscription prices and enshitification of streaming platforms, more and more people are interested in building their own home labs. “What’s that” I hear you say?

What is a home lab?

A home lab or home server is a small, always-on computer in your house that runs the services you would otherwise pay other companies to host. Mine is a refurbished Lenovo ThinkCentre M910q Tiny with an Intel Core i5-6500T, 16GB of RAM and Unraid, plus an Orico five-bay drive bay full of Western Digital Red NAS drives. I reckon the whole thing came in under €500. Being totally transparent, that’s an estimate rather than a receipt-perfect total. And it needed quite a bit of time to get up and running too.

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My take is that most people overthink the hardware and underestimate what they’ll get out of it. You don’t need much kit, and you don’t need to be a developer, though a bit of problem solving helps. Even if you have an old laptop lying around at home, it could be the perfect machine for the job.

I’ll cover why you might want one, what I bought and where I found it, and where a build like this falls short.

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Why build a home server?

Because a lot of what you pay for every month is software you can run yourself. Once you have a machine ticking away at home, some of those subscriptions start to look optional.

For me, the tipping point was 1Password getting more expensive. I said “screw this” and set up my own password manager, a self-hosted Vaultwarden server that I use with the Bitwarden apps. That’s when it clicked that we pay a lot of companies a lot of money for access to cloud platforms that a home lab can run for us. I’d rather not build everything on rented land.

With the likes of Plex or JellyFin you can stream any video file that you’ve legally acquired yourself, of course, from your home server to your phone and other devices anywhere in the world.

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The biggest win in my house is Home Assistant. Before the server, my smart home was a fragmented mess of dozens of separate apps, one for each brand of device. Now most of my smart devices run through a single instance of the Home Assistant smart home platform on the server, which is class.

Do you need expensive hardware to build a home server?

No. A refurbished office PC is more than enough for most people, and that’s what my ThinkCentre is. The i5-6500T is a 35W chip, the server runs 24/7, and my electricity bill hasn’t moved much, so running costs aren’t something I worry about.

The main thing that can push you towards beefier hardware is transcoding, which is your server converting a video file on the fly because the device you’re watching on can’t play it natively. If your TV or streaming box plays your files directly, your server barely breaks a sweat. You could argue that transcoding video from your own files would do better with a GPU. I haven’t found that to be a problem yet.

Where you do need graphics power is running AI models locally. My ThinkCentre only has integrated graphics, so local AI on it is CPU-only and limited to tiny models. For the heavy lifting, I have the server wake my gaming PC, which has an AMD Radeon RX 7900 XTX with 24GB of VRAM, using Wake-on-LAN. It works, and it means I didn’t have to buy a second machine for AI. But I have to stress: that’s me more boasting to the nerds reading this making you think that if you’re an average Joe interested in something like this, you need to worry about that.

What did my home server cost?

The ThinkCentre came from a refurbished ThinkCentre listing on Refurbed.ie. The drive bay was €100 from a seller on Adverts.ie.

For storage, I went to one of the tech auctions that get held when old offices clear out their kit. I picked up two Western Digital Red NAS drives for about half what I’d normally expect to pay, then bought the rest from Adverts. My array is four drives of about 3.7TB each, with three for data and one for parity, which gives me about 11TB usable. There’s also a roughly 240GB NVMe drive that acts as a cache for app data and downloads.

The software was Unraid, which runs the whole server. Unraid has since restructured its tiers, and its Starter licence currently costs US$49 for up to six storage devices, with a 30-day free trial available. I’ll probably upgrade my licence one of these days, because I can see another ThinkCentre joining the setup.

One pro tip here is I bought my license during Black Friday, when I got some kind of a discount on the base package. They don’t do it on lifetime packages but you might be able to save something on Black Friday so it’s good to start planning this now.

How to build a home server cost-effectively

Start with the cheapest machine that does the job. A refurbished business PC or a spare desktop you already own will handle a home server workload, and buying refurbished means someone else has already taken the depreciation hit.

Buy storage based on the size of your library today, not the library you imagine having in three years. It’s easy to overspend on drives before you know what you need, and drives are the easiest thing to add later. If you’re buying second-hand, stick to NAS-rated drives like the Western Digital Reds and check how many hours they’ve been running before you hand over any money. Auctions and classifieds are where the bargains are, and I got about half off at mine.

If you can, connect the server to your router with an Ethernet cable rather than relying on WiFi. It’s a small thing that makes streaming and file access far more reliable.

Alongside the likes of the Unread subscription on a monthly basis, also factor in that you may want to include a VPN for reasons.

Do you need to know how to code to build a home server?

A little, but far less than you’d think, because AI now does a lot of the heavy lifting. There is a bit of coding involved and a bit of problem solving, and I know I couldn’t have done it without ChatGPT initially and now Claude. For example do I know how to code? No, I understand vaguely how coding works. It’s just another language. To be honest with the likes of AI these days, even a free AI will probably help you significantly in what you’re doing.

Claude now knows my system better than I do. It has the history of how I built it, the specs, the hardware, and how everything connects together. Because Claude pretty much built the software side and the connections in the first place, when something goes wrong I tell it what’s happening and it has a fair idea what the culprit is. If you go down this route, give your AI the specs and the build history up front and keep that record updated, because that’s what turns troubleshooting from an evening into a few minutes.

That said, running your own home lab means you’re in control, which is a good thing and a bad thing. You need to be very good with your AI prompts. I tell it not to do anything without my permission, not to do anything too risky, and to explain the risks to me before I approve anything.

Knowing how to build a good workflow and having problem-solving skills is far more important than knowing how to code. But as I said, be warned. You do need to be careful.

I accidentally deleted all my passwords one day. Luckily, I had one machine that hadn’t synced yet so I got it disconnected from the web and backed everything up. The lesson was that deleting something on your phone can delete it from the account, not just the local copy.

That’s the downside of owning the whole stack. There’s no support line to ring, and if you delete something, that’s on you.

How do you access a home server when you’re away from home?

I use Tailscale, which tunnels me into the server from wherever I am. That’s how I get to my password manager and everything else when I’m out. As far as I know it’s pretty secure, going by everything I’ve seen. I’m sure some cybersecurity person will tell me not to do this, but I’d take a private tunnel over exposing the server to the open internet. If you’d like to try it, the Tailscale private network is free to start with for personal use.

Should you use Plex or Jellyfin?

If you want to spend nothing, start with the Jellyfin media server, which is free and open source. I have a lifetime Plex Pass that I picked up before the price went through the roof this year, and that’s a big deal for me. If you’re starting now, it changes the maths. Plex’s paid Plex Pass covers things like hardware transcoding, and streaming video outside your home requires either a Plex Pass or a Remote Watch Pass. If you only ever watch on your home network, that won’t matter to you. If you want to watch away from home, factor it into your costs before you commit.

And if you’re wondering what any of these words mean, you’re still at the start of your journey. Plex and Jellyfin are both effectively the software you’ll need to build your own Netflix.

What a home server won’t do well

Let’s not dance around the fact that it’s your problem when it breaks. Uptime, updates and backups are down to you, and the first few weekends will involve some head scratching. When the lights stop turning on or the movies stop streaming, it’s my fault and if that happens when I’m traveling and my other half is home alone, I’m in for a bad time.

I also have two weak spots. I don’t have a UPS, so a power cut could catch the server mid-write. Rather annoyingly I did buy a UPS at that same auction where I got my hard drives but the battery cells were completely dead. At the time I didn’t know how to test them on site. At least the hard drives are good but I’m still on the market for a good backup power supply.

And parity isn’t a backup. It means that if a drive fails, I can replace it, rebuild and carry on, but it does nothing if I delete something or the whole box dies. I don’t have a proper 3-2-1 backup, meaning three copies on two types of media with one kept off site. I really should, and I’ll probably have to suffer before I feel it’s important enough to go through the effort. Learn from me and set it up sooner.

Touchwood, it’s been going really well, but I’d be lying if I said a build like this is plug and play.

The TL;DR

You might be reading this, saying, “I haven’t learned everything I need to know to build myself a home lab or a home server” and that’s entirely correct, because if you think you can learn it all from one article like this, I’m going to hazard a guess you probably shouldn’t be building a home server.

Building a home server needs problem-solving and thinking outside the box. Somewhat ironically you need to be able to do some research, use Google search, be open to using AI, and buy a few bits and pieces of hardware.

I couldn’t believe it when I started my home server for the first time and discovered I had to put Unraid onto a USB stick and plug that in. It didn’t make any sense to me. Now actually, that’s changed but at the time it boggled my mind that I had just bought a really good USB stick for this one job. That’s just the very start of the learning that you’ll go through. But it’s been really enjoyable. I love when a price hike comes in, like 1Password, and I think to myself, “I can build a solution for that without having to pay for it”.

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