Dedicated hosting is pretty pricey, I don't think you'll be able to find anything below $120 - 140 a month for specs like
2.3GHz CPU
100 mbps Uplink
4 GB Ram
500 GB storage
10 TB Bandwidth
Up to 5 Dedicated IPs
This is
hostgator's cheapest dedicated plan. Actually I recommend them for any type of hosting. Dedicated hosting is more pricey than shared or VPS because they give you dedicated hardware somehow like leasing an actual physical server and they maintain it for you to an extent.
Choosing which plan to go for depends on what you are going to build and how "large" is your web application and what do you need from it. Most of the time a VPS(which is cheaper) can be enough for most needs. Here is a
nice and clear explanation about the differences between between a VPS and a dedicated server plan. I suggest you give it a read.
Also before choosing any plan make sure you decide based on the requirements from your final website which directly reflect the specs and needs from a server:
- Which framework/technology the web app is built in and how much resource intensive would it be
- Will you install additional web apps on the server such as cpanel?
- Which Linux distribution are you planning to install and work with. Will you want to install a GUI or administer it from the terminal.
- How much traffic are you expecting to have in the beginning? How many live users are you expecting? (can directly affect your RAM, bandwidth, processing and IO)
- Will you perform caching on your site's content?
- etc...
I think its better to start off with a relatively cheap VPS plan, as needs grow you upgrade your plan until it starts to make sense moving to a dedicated host in terms of the cost/benefit.
A third option you may want to consider is cloud hosting such as AWS, Rackspace or Heroku(which is awesome but pretty pricey). These are more pricey in general than a VPS but generally more scalable, secure, reliable and performant (of course as long as you keep paying as your needs grow). And they abstract a lot for you in terms of hardware, maintenance, deployment and administration so you can focus on your web app. You can read about cloud hosting and its advantages a lot if you search.