if you are on your own or a handful of people, hosting at home isnt a big issue providing you tunnel. you can use wireguard or iptables to forward traffic to your home VPS to conceal its location. you can also buy torguard (jannyduty for 50% off for life btw) and use their socks5 proxy with pleroma to conceal your location

realistically, if you aren't relatively "large" in that people know your instance and you aren't hardcore fedposting or posting CSAM I think you'll be fine