Self-Hosting Your Projects with Hetzner in 2025

Why Self-Host in 2025?

In an era of expensive cloud services and "serverless tax," self-hosting has become increasingly attractive for developers and small businesses. With a Virtual Private Server (VPS) from Hetzner, you can host multiple web applications for a fixed monthly cost, maintaining complete control over your infrastructure.

Two Approaches to Self-Hosting

This guide presents two approaches to self-hosting on Hetzner:

1. Budget Setup: A minimalist $4/month VPS with manual deployment - perfect for small projects or learning
2. Scalable Solution: A more robust setup using Coolify as a deployment platform - ideal for managing multiple applications

Let's explore both options and help you decide which is right for your needs.

Approach 1: Budget Self-Hosting ($4/month)

Step 1: Setting Up Your Hetzner VPS

1. Register on Hetzner Cloud:

   • Create an account at Hetzner Cloud
   • You can register quickly with PayPal for payment
   • Use a company email rather than personal if possible

2. Select a Server:

   • Choose the CX11 plan ($4/month) with 1 vCPU, 2GB RAM, and 20GB storage
   • Select Ubuntu as your operating system
   • Add your SSH key during setup (generate one with ssh-keygen if needed)
   • After creating the server, note its IP address

Step 2: Setting Up Your Domain and SSL

1. Configure DNS with Cloudflare:

   • Create a Cloudflare account and add your domain
   • Add an A record pointing to your Hetzner VPS IP address
   • Set SSL/TLS to "Full" mode for secure connections

2. Install Caddy as Web Server:

   # SSH into your server
   ssh root@your-server-ip
    
   # Install Caddy
   sudo apt update
   sudo apt install -y debian-keyring debian-archive-keyring apt-transport-https curl
   curl -1sLf 'https://dl.cloudsmith.io/public/caddy/stable/gpg.key' | sudo gpg --dearmor -o /usr/share/keyrings/caddy-stable-archive-keyring.gpg
   curl -1sLf 'https://dl.cloudsmith.io/public/caddy/stable/debian.deb.txt' | sudo tee /etc/apt/sources.list.d/caddy-stable.list
   sudo apt update
   sudo apt install caddy
    
   # Start and enable Caddy
   sudo systemctl start caddy
   sudo systemctl enable caddy

3. Configure Caddy for Your Domain:

   # Edit Caddyfile
   sudo nano /etc/caddy/Caddyfile

   Replace the contents with:

   yourdomain.com, www.yourdomain.com {
     reverse_proxy localhost:3000
   }
   

   Then reload Caddy:

   sudo systemctl reload caddy

Step 3: Setting Up Deployment from GitHub

1. Generate SSH Key for GitHub:

   ssh-keygen -t ed25519 -C "[email protected]" -f ~/.ssh/id_ed25519_github
   cat ~/.ssh/id_ed25519_github.pub

2. Add the SSH Key to GitHub:

   • Go to GitHub Settings → SSH and GPG keys
   • Add the new key with a descriptive name

3. Configure SSH for GitHub:

   nano ~/.ssh/config

   Add:

   Host github.com
     HostName github.com
     User git
     IdentityFile ~/.ssh/id_ed25519_github
   

4. Clone Your Repository:

   git clone [email protected]:username/repository.git
   cd repository

Step 4: Running Your Application with PM2

1. Install Node.js and PM2:

   # Install Node.js
   curl -fsSL https://deb.nodesource.com/setup_lts.x | sudo -E bash -
   sudo apt install nodejs
    
   # Install PM2
   sudo npm install -g pm2

2. Start Your Application:

   # Install dependencies
   npm install
    
   # Start with PM2
   pm2 start npm --name "your-app" -- start
    
   # Configure PM2 to start on boot
   pm2 save
   pm2 startup

3. Updating Your Application:

   # Pull latest changes
   git pull
    
   # Restart the application
   pm2 restart your-app

This budget setup is perfect for personal projects, portfolio sites, or small applications. For about $4 per month, you get a fully functional server with automatic SSL, reliable hosting, and simple deployment.

Approach 2: Scalable Self-Hosting with Coolify

As your needs grow, you might find yourself needing a more organized approach to manage multiple applications. This is where Coolify comes in - an open-source, self-hosted Heroku/Netlify/Vercel alternative.

Step 1: Choose the Right Hetzner Servers

For a robust Coolify setup, you'll need two VPS instances:

1. Coolify Control Plane: A small VPS (CAX11 - ~$5/month) to run Coolify itself
2. Deployment Server: A larger VPS based on your needs:
   • CAX21 (~$10/month): Good for multiple smaller applications
   • CAX31 (~$20/month): Better for resource-intensive apps or AI workloads
   • Dedicated server (~$40/month): For serious workloads, consider Hetzner's server auction for refurbished servers with great specs

Step 2: Install Coolify

1. SSH into your Coolify VPS:

   ssh root@coolify-server-ip

2. Run the Coolify Installer:

   wget -q https://get.coolify.io -O install.sh && bash ./install.sh

3. Access the Coolify Dashboard:

   • Open a browser and navigate to http://coolify-server-ip:8000
   • Complete the initial setup process

Step 3: Connect Your Deployment Server

1. Add Your Deployment Server in Coolify:

   • Navigate to the "Servers" section in Coolify
   • Click "Add Server" and enter your deployment server details
   • Coolify will automatically set up the necessary components

2. Configure GitHub Integration:

   • Go to "Sources" in Coolify
   • Add a GitHub App integration
   • Follow the wizard to authorize Coolify to access your repositories

Step 4: Deploy Your Applications

1. Create a New Application:

   • Click "Add Resource" and select the appropriate type (web app, database, etc.)
   • Connect to your GitHub repository
   • Configure build settings based on your application needs

2. Configure Domains and SSL:

   • Add your custom domain in the application settings
   • Coolify will automatically handle SSL certificate issuance

3. Monitor Your Deployments:

   • Use the Coolify dashboard to view logs, resource usage, and deployment status
   • Set up notifications for deployment success/failure (supports Telegram, Discord, etc.)

Why Self-Host Instead of Using Cloud Services?

Cost Benefits

Cloud providers like Vercel, Netlify, and Heroku charge based on usage metrics like:

• Number of applications/services
• Build minutes
• Bandwidth
• Function invocations

With self-hosting, you pay a fixed price for your hardware regardless of how many applications you run. This becomes increasingly cost-effective as you add more applications.

Freedom from Limitations

Self-hosting eliminates common cloud service restrictions:

• No timeout limits for API routes or serverless functions
• No bandwidth caps or expensive overage charges
• No vendor lock-in or proprietary systems
• Full control over runtime environments and configurations

Perfect for AI Applications

For AI and ML applications specifically:

• Run larger models locally without cloud constraints
• Avoid cold starts for better performance
• Customize infrastructure for specific model requirements
• Keep sensitive data on your own infrastructure

Conclusion: Choose the Right Approach for Your Needs

Self-hosting with Hetzner offers a compelling alternative to cloud services, whether you choose:

• The Budget Approach: $4/month for a simple setup perfect for personal projects
• The Coolify Approach: $15-40/month for a robust, scalable solution for multiple applications

Both approaches give you complete control over your infrastructure while avoiding the "serverless tax" of pay-per-use cloud platforms.

The right choice depends on your specific needs:

• Starting small? Begin with the budget approach and upgrade later
• Managing multiple apps? Coolify provides the organization and automation you need
• Running resource-intensive applications? Hetzner's larger instances or dedicated servers offer excellent value

Whichever path you choose, self-hosting represents a return to a simpler, more predictable cost model for web development while maintaining full control over your digital presence.