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If you gave up running a single user instance of Mastodon then I really don't think you should be running a Lemmy instance. It's a fediverse compliant system that will have many of the same issues as Mastodon.
I run a small 10 person Instance of Mastodon and it runs very well on a small server of 4GB Memory and 100GB disk. Not sure why you had issues with a 1 man instance.
Out of interest why would you want to run a 1 man Lemmy Instance?
I'm not alone.
https://github.com/mastodon/mastodon/issues/20255
Compute was never an issue. I had my instance hosted on Hetzner and it ran just fine.
My concern is the storage, as described above, constantly checking disk space, cronjobs, purging etc etc
And whether I host a single user or a multi user instance is neither here or there. My question still stands.
Cloud storage is expensive. Physical storage is cheaper in the long run. Might be a good candidate to actually self-host on-prem. Throw a bunch of SATA SSDs at it, which are astonishingly dirt cheap nowadays and probably fast enough for a medium-sized instance; maybe add an NVMe disk cache if you want to be fancy.
One of these months (or years...) fiber will finally be available in my area, at which point I'm going to move most of my servers from the cloud to on-prem. But for now I can't, because 10 Mbps upload is a pretty tight bottleneck...
I never had to check disk space, cron jobs or do any purging.
Where did you run you Mastodon Instance. I run mine at Digitial Ocean, been running for nearly a year and have not encountered any issues and I'm running on the cheapest server they have.