For those having issues and getting the dreaded connection error when connecting via local IP addresses I have a fix that might work for you. In my case the game server browser connects via internet in the server browser and routes traffic through internet(out of the wan) back in my router which causes lag, latency and uses unnecessary bandwidth. In my case its using a satellite internet which causes considerable latency between 500-900ms. The game SHOULD be using the LAN connection in this case since both computers are local but it doesn't. This is the workaround.
To do this fix you will need:
Steps
Keep in mind if your local PC IP changes or someone else wants to host you will have to change the settings. Its recommended to set static IPs on the computer hosting. Keep in mind port forwarding CAN expose your network to port scans and attacks. However its still likely safer than UDnP which is enabled by default on most routers.
Good luck Valheimers!
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