> I don't think I could a RPi as cheaply once parts and power supply etc are taken into account

The RPi Zero 2W costs $15 and runs HA just fine. One can splurge on a pricey case, microSD, and high-amp GAN charger, and still be under 50% of your spend. You don't have to buy the flagship RPi.

500MB is just not enough RAM for a good HA experience. I would go with at least 2GB. If you have a few add-ons running I would go with 4 or more.

If it's an option I would always go with an SSD for HA. It makes a big difference in usability. Writing often and a lot to SD cards, like HA does, kills them way too fast