Proxmox VE Setup — Virtualization for the Homelab

Running everything on bare metal means one failed hard drive takes down your NAS, your media server, your VPN, and your home automation — all at once. Proxmox VE turns one physical server into an isolated VM and container platform where each service runs in its own sandbox.

I run Proxmox VE 8 on a mini PC with six VMs and a dozen LXC containers — TrueNAS, Home Assistant, Pi-hole, OmniRoute, Ollama, and this blog — all on a single box with automated snapshots and backups. This guide walks through installation, storage, networking, and creating your first VMs and containers.

What It Is

What You Get

The Core Problem: Bare Metal Is Fragile

Step 0 — Hardware Requirements

Minimum

BIOS Settings

Enable these in BIOS/UEFI before installing:

Step 1 — Installation

Download and Flash

1. Download Proxmox VE ISO from proxmox.com/en/downloads
2. Flash to USB: dd if=proxmox-ve_8.2-1.iso of=/dev/sdX bs=1M status=progress
3. Boot from USB

Install Process

1. Select Install Proxmox VE (Graphical)
2. Accept EULA
3. Select target disk (install to SSD/NVMe)
4. Set country, timezone, keyboard
5. Set root password and email
6. Set hostname (e.g., proxmox.home.local)
7. Set management IP (static recommended)
8. Click Install

After First Boot

Access web UI at https://YOUR_SERVER_IP:8006

Login with root / your password.

Step 2 — Remove Enterprise Repo (Free Use)

Proxmox enables the enterprise repo by default, which shows warnings without a subscription. Disable it:

# SSH into Proxmox
ssh root@YOUR_SERVER_IP

# Disable enterprise repo
sed -i 's/^deb/# deb/' /etc/apt/sources.list.d/pve-enterprise.list

# Add no-subscription repo
echo "deb http://download.proxmox.com/debian/pve bookworm pve-no-subscription" > /etc/apt/sources.list.d/pve-no-subscription.list

# Update
apt update && apt upgrade -y

Step 3 — Storage Configuration

Local Storage (ZFS)

# Check available disks
lsblk

# Create ZFS pool (mirror = RAID 1)
zpool create -o ashift=12 \
  tank mirror /dev/sda /dev/sdb

# Create datasets
zfs create tank/vm-disks
zfs create tank/container-rootfs
zfs create tank/backups
zfs create tank/images

# Verify
zpool status
zfs list

Add Storage to Proxmox

Datacenter → Storage → Add → ZFS

NFS Backup (Optional)

# On your NAS/NFS server
# Export /backup to Proxmox IP
echo "/backup 192.168.40.20(rw,sync,no_subtree_check)" >> /etc/exports
exportfs -ra

Datacenter → Storage → Add → NFS

Step 4 — Networking

Linux Bridge (Default)

# /etc/network/interfaces
auto vmbr0
iface vmbr0 inet static
    address 192.168.40.20/24
    gateway 192.168.40.1
    bridge-ports eno1
    bridge-stp off
    bridge-fd 0

VLAN-Aware Bridge

# For VLAN-segmented VMs
auto vmbr0
iface vmbr0 inet static
    address 192.168.40.20/24
    gateway 192.168.40.1
    bridge-ports eno1
    bridge-stp off
    bridge-fd 0
    bridge-vlan-aware yes
    bridge-vids 1 10 20 30 40

VM Network with VLAN

VM Network Config:
Model: VirtIO (paravirtualized)
Bridge: vmbr0
VLAN Tag: 40 (Servers)
Rate Limit: 1000 (Mbps, optional)

Step 5 — Create Your First VM

Web UI Method

1. Create VM (top right button)
2. General:
3. Name: truenas
4. OS: ISO image (upload TrueNAS ISO)
5. System: BIOS = OVMF (UEFI), SCSI Controller = VirtIO SCSI
6. Disk: 32 GB on tank:vm-disks, Discard + SSD Emulation
7. CPU: 4 cores, Type = host
8. Memory: 8192 MB (8 GB)
9. Network: VirtIO, Bridge = vmbr0, VLAN = 40
10. Start and open console

Command Line Method

# Create VM with qm
qm create 100 \
  --name truenas \
  --memory 8192 \
  --cores 4 \
  --cpu host \
  --scsihw virtio-scsi-pci \
  --scsi0 tank/vm-disks/vm-100-disk-0,size=32G \
  --ide2 local:iso/truenas.iso,media=cdrom \
  --net0 virtio,bridge=vmbr0,tag=40 \
  --ostype l26 \
  --bios ovmf \
  --machine q35

qm start 100

Step 6 — LXC Containers

LXC containers share the host kernel — they're faster and lighter than VMs.

Create LXC Container

Create CT (Web UI button)

Command Line

pct create 200 \
  local:vztmpl/debian-12-standard_12.7-1_amd64.tar.zst \
  --hostname pihole \
  --password your_password \
  --rootfs local-lvm:8 \
  --cores 2 \
  --memory 1024 \
  --swap 512 \
  --net0 name=eth0,bridge=vmbr0,tag=30,hwaddr=auto

Manage Containers

pct start 200          # Start
pct stop 200           # Stop
pct reboot 200         # Reboot
pct enter 200          # Shell access
pct exec 200 -- bash   # Execute command

Step 7 — Snapshots and Backups

Snapshots

# Take snapshot
qm snapshot 100 pre-update

# List snapshots
qm listsnapshot 100

# Restore snapshot
qm rollback 100 pre-update

Automated Backups

Datacenter → Backup → Add

Manual Backup

# Backup specific VM
vzdump 100 --storage tank/backups --compress zstd

# Backup all VMs
vzdump --all --storage tank/backups --compress zstd

Step 8 — GPU Passthrough (Optional)

For running Ollama, Plex transcoding, or gaming VMs:

# Enable IOMMU (Intel)
echo "intel_iommu=on iommu=pt" >> /etc/default/grub
update-grub
reboot

# Verify IOMMU groups
find /sys/kernel/iommu_groups/ -type l | sort

# Bind GPU to vfio-pci
echo "vfio-pci" > /etc/modules
echo "options vfio-pci ids=10de:2684,10de:22ba" >> /etc/modprobe.d/vfio.conf
update-initramfs -u
reboot

Assign GPU to VM

qm set 100 --hostpci0 0000:01:00,pcie=1,x-vga=1

What I'd Tell Anyone Building One

1. Start with LXC containers, not VMs. LXC shares the host kernel and uses 1/10th the resources. Use VMs only when you need a different OS or full hardware isolation. Most homelab services (Pi-hole, Home Assistant, databases) run perfectly in containers.

2. ZFS mirrors, not RAID 5. RAID 5 rebuild times on large drives are terrifying — a 20 TB drive can take 24+ hours to rebuild, during which another failure kills your data. ZFS mirrors (2-drive RAID 1) rebuild in minutes and give you Copy-on-Write integrity checks.

3. Snapshot before every change. One qm snapshot before an update takes 2 seconds and saves you from a broken VM. Rollback takes 30 seconds. There's no reason not to snapshot.

4. Use host CPU type. Setting CPU type to host passes through all host CPU features (AVX, AES-NI, etc.) to the VM. Default kvm64 disables these and hurts performance.

5. VirtIO everything. Use VirtIO network cards, VirtIO SCSI controllers, and VirtIO disk drivers. They're paravirtualized and dramatically faster than emulated hardware.

6. Separate boot and data drives. Put Proxmox on a small NVMe boot drive. Put VM disks on separate storage (ZFS pool, NFS, or Ceph). If the boot drive fails, your VMs survive.

Get It

• Proxmox VE: proxmox.com
• Proxmox Wiki: pve.proxmox.com/wiki
• Proxmox Forums: forum.proxmox.com
• Backup Server: proxmox.com/en/proxmox-backup-server

Last updated: 2026-09-01 — Tested on Proxmox VE 8.2 with ZFS mirrors, LXC containers, and KVM VMs.