Dedicated servers are designed to give you more control of what happens with your web hosting. You have a complete computer “dedicated” to doing your bidding. Now this doesn’t mean you buy a computer and put it in your basement.
In fact, you will probably need a technical person to help you operate your dedicated server which will be located in a hosting service somewhere.
When your hosting fees for individual websites exceed the cost of a dedicated server, you might want to start thinking about getting one.
There is one drawback you should know about if you are thinking about getting a dedicated server. If you lump all your sites (that are on the same topic) on this server and then link them together in an effort to create more link popularity, the search engines will notice that you are linking to yourself because they will see all the links coming from the same IP address (IP addresses are numbers associated with server computers) and they will discount the value of your links.
If all your sites are on the same topic, you would be better off getting cheap hosting at multiple sites around the country or even in other countries. That way when you link one of your own sites to another one of your own sites, it won’t be obvious to the search engines and you’ll get the full value of the link.