IPv4 for a New Hosting Company: Lease, Buy, or Borrow
IPv4 for a hosting company, explained by an operator: why a /24 is the floor, what ASN and RPKI involve, and whether to lease or buy addresses.
IPv4 for a hosting company is the gate that stops more people than hardware ever does. You can buy a server this afternoon. Getting addresses to put on it, in a way the rest of the internet will actually route, takes longer and costs more than almost every new host expects.
Here is the shape of the problem, the three ways out of it, and what each one really involves.
Why a /24 is the floor#
A /24 is a block of 256 addresses, and it is the smallest piece of IPv4 the internet will reliably carry. Most large networks filter out anything smaller as a matter of policy, so a /25 or a /26 that you announce yourself simply will not reach much of the world. That single fact drives everything else: if you want your own routed space, 256 addresses is the minimum viable purchase, whether or not you need that many.
Below that threshold you are not announcing anything. You are using addresses that belong to somebody else's network, which is fine, and is where nearly every host starts.
Lease, buy, or borrow#
Three routes, in ascending order of cost and control.
| Route | What you get | What it costs you |
|---|---|---|
| Borrow from your upstream | Addresses routed to you out of your provider's block | Nothing up front, but the space is not portable. Change provider and every address changes with it. |
| Lease a block | A /24 or larger you control, announced on your behalf or by you | A recurring monthly cost per address, forever. No capital outlay, no asset at the end. |
| Buy a block | Registered space that is yours, transferable and sellable | A large one-off outlay plus registry fees. It is an asset, and it has held value. |
Broker listings currently advertise leases in the region of thirty five to fifty cents per address per month, with bigger blocks earning better per-address rates and RIPE space carrying a premium over ARIN space. Purchase prices sit around $35 to $52 an address, up from single digits a decade ago. Do the arithmetic on a /24 before you assume leasing is the cheap option: a lease is a bill that never ends, and at those rates it pays for a purchase in a handful of years.
Borrowing is the right first move for almost everyone. It costs nothing, it works immediately, and the portability you give up does not matter until you have customers who would notice a renumbering.
What announcing your own space involves#
If you lease or buy, you still have to get the block onto the internet. Four pieces, none of them optional:
- An ASN. An Autonomous System Number is the identifier that marks your network as its own thing on the global routing table. You request one from your regional registry, which for a US company is ARIN, and it carries an annual fee. See ARIN's request guide for the current process and fee schedule.
- An LOA. A Letter of Authorization is the document that tells your upstream provider you are permitted to announce a given block. It is a piece of paper, it is checked by a human, and a sloppy one will stall you for days.
- ROAs and RPKI. A Route Origin Authorization is a signed statement in the registry saying which ASN is allowed to originate your prefix. RPKI is the system that validates it. Networks increasingly drop announcements that fail validation, so getting this wrong does not produce an error message, it produces silence.
- A BGP session. BGP is the protocol networks use to tell each other which addresses they can reach. Your upstream has to be willing to establish a session with you and accept your prefix, and not every provider offers that.
That last point is the one people skip past. Announcing your own space is a capability your provider grants you, not something you arrange unilaterally, and plenty of hosts will route addresses to you while declining to peer with you.
How we handle it, and why#
Every NoBull Networks VPS and VDS comes with a dedicated IPv4 address that stays yours for the life of the service, surviving reinstalls and upgrades, with additional addresses available from the Networking tab of the cloud portal. Those are borrowed addresses in the sense above: ours, routed to you. For most customers that is the correct answer and always will be. The details are in IPv4 and IPv6 addresses.
Expect to justify additional addresses in a line or two. That is not us being difficult; a short justification is standard practice now that the free pools are gone, and a provider handing out IPv4 without asking is one to look at more carefully.
Colocation is where the other options open up. We will announce your own ARIN or RIPE prefixes from our multi-homed network on your behalf, or route IPv4 and IPv6 subnets to you from our space, whichever fits your deployment. We do not hand out customer-run BGP sessions by default, and we would rather say that plainly than let you find out after you have signed: if your build genuinely needs its own session, raise it in the quote ticket and we will talk it through properly.
One thing that costs nothing and is worth doing on day one: set reverse DNS to match your hostnames. Addresses carry reputation, and an inherited block with a bad history is a problem you want to find before your customers do.
Where this sits in the plan#
IP space is one line on a longer bill, and it is rarely the biggest one. It is just the one most likely to stop you. We set out the rest of what a new host pays for before revenue arrives in what it costs to start a hosting company.
FAQ#
How much does it cost to lease a /24?
At the rates brokers currently advertise, a /24 of 256 addresses lands somewhere around a hundred dollars a month, varying with the registry, the block size, and the lease term. Larger blocks earn better per-address rates.
Should I lease or buy IPv4?
Lease if you need space now, are not sure how much you will need, or cannot justify the capital. Buy if your requirement is stable and long term, because at current prices a lease pays for a purchase within a few years and leaves you owning nothing.
Can I announce a /25 or smaller?
Not reliably. Most large networks filter prefixes longer than /24, so a smaller block will not be routable across much of the internet. Use space routed to you by your provider instead.
Do I need an ASN to be a hosting company?
No. Plenty of profitable hosts run entirely on addresses routed to them by an upstream. You need an ASN when you want portable space, multiple upstreams, or control over how your traffic enters your network.
What is an LOA and who writes it?
A Letter of Authorization, written by whoever holds the block, telling a network it may accept your announcement of it. If you lease, your lessor issues it. If you own the space, you write it yourself.