You technically can host private servers. Aslong as you host it (or someone with access to the game) and have world saving mode it will act just like a normal server. Keep in mind you should restart the server every hour or so to make sure it saves everything.
On display it now appears that ylands only supports dedicated servers but that's only paper. The main reason for this is to avoid players (especially new ones) to getting bad server experience from 3rd party providers.
Keep in mind the amount of money you are "saving" is also a loss income to Ylands (why do you think Minecraft have their own official server)