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I rent a server from Hetzner Germany;
i7 3770k, 16GB of RAM and 2x3TB disks, connected to the internet on a gigabit net connection.
Can add whatever I like to the server ( SSDs, etc ) for about R150~ per month
Total package, including 5 extra static IP's for virtual machines comes to R450 per month.
Can you watch xbmc on it?