There are many different options for Terraria, but one of the best is free server hosting. For example, I use https://godlike.host/terraria-free-server-en/ . This allows you to quickly set up a server and start playing in just a couple of minutes. This hosting is ideal for playing with friends, because it does not require long settings, and you can just enjoy the game. They have good performance, and due to the fact that it is free, you do not have to worry about additional costs. The main thing is that the server works stably, and you can play without lags. I highly recommend trying this option.

As told Erika, Godlike is a really good way as a free hosting. When I play with some friends, I also like to use https://axenthost.com/games/terraria/ where we can create a group of friends and all participate with free credits for our free terraria server. The “free” servers are as powerful as the paid ones, the only difference is the way you obtain credits, by collecting them for free or by paying for them. Just a thing, if you want to change the world size which is by default “small”, you will need to use 2GB of ram instead of 1.