Hi Andrew,
I have dedicated "allocated machine" for the web server (LAMP) and it is running very well. No Photoshop on Linux 😈 

No problem with ISP's in Slovenia  - we have unlimited bandwidth and on a private line (getting fibre-optic this days) so there is no problem with "internet  often congested around peak hours". Power is stable  maybe 1-2 outages per year or not even that. Normally outages are scheduled maintenance  - and my small UPS can handle that.

Small machine (old server used for backup all of the data 😀 and as a MySQL replica server )

Every month at least $45 for Linode - hell no!