Usually, I’d aim for the cloud environments for public resources (serving more than like 20 people), as the traffic won’t be hitting your home network.
Additionally, selfhosting a public service like Lemmy on your home environment probably wouldn’t have the same uptime or reliability, as I only have one strong ISP signal, and no backup generator.
However, pricing wise, selfhosting at home is much cheaper for the processing power you get.
I also run a reverse proxy using a cheap VPS. At home I have several vlans some of which are dedicated for self hosting and exposed to the reverse proxy.
I use Caddy for the proxy and wireguard to join my VPS and home network vlans.
My home IP can never be exposed and the VPS provider only sees the wireguard traffic.