What game are you hosting so the computational requirements are paired properly to a hardware?
Other thing to consider is if your having issues with hosting and playing using your FX8350 it might be just that you will want to govern what cores are used for hosting vs which ones are used for running the game. That is, if the hosting is not that intensive and say a dual-core could really handle that, you could set core affinity for the server processes on your system to set say core 6 and core 7 to hosting and shutting off cores 0 thru 5, so that cores 0 thru 5 are for everything else including running the game that most games at 4Ghz clock CPU and 6 cores are plenty, and your local server hosting with 2 cores at 4Ghz would probably be plenty too.
From my experience with LAN parties and hosting. There are 4 things to take into consideration: ( CPU Processing Power, RAM Amount, Hard Drive Performance, and Network )
CPU processing power... I am thinking you actually have plenty, but if you mess with setting up core affinity you will get it to behave much better for you as for I too own AMD 8-core FX processor systems a FX8300 3.3Ghz and FX8350 4Ghz, and I have had to play with core affinity when multitasking for certain situations. So upgrading away from the CPU you already have to a Core i7 might be a waste of money for something that can be resolved for free in task manager.
You might have plenty of CPU but say your running at 8GB of RAM and the server process is eating up 4GB, now your game only has 4GB etc. So maybe all you need is to upgrade to 12 or 16GB RAM.
You could have plenty of CPU and RAM, yet the server process has a database and maybe even map data that is passed over the network to others. This can be read/write intensive and so while you think your computer is too slow, it might just be that you will want to install a second hard drive or even better a SSD or second SSD so that the server service being hosted is on a different drive than the drive that the game is running from.
Network speed also is to be considered but rarely a problem these days. If you have a few people playing and on a 100mbps network or faster with a network switch then your pretty much golden as long as no one is downloading junk from the web at the same time which will make for traffic congestion.
Most game hosting that I have done, I found out that the CPU for that host doesnt need to be that powerful, however the read/write hard drive or SSD speed, RAM amount, and network speed is a must.
I tinker in free time with trying to see how weak of a computer/ lesser power consuming of a computer I can use to achieve a goal of hosting or running something. I have even gone in and intentionally under clocked my CPU to see how it will work at 700Mhz etc. At one extreme I had a Pentium 3 600Mhz with 384mb RAM acting as a game server where it was suggested for you to run a Core 2 Duo or better. Because Windows XP will run on the Pentium 3 I was able to run the server on the Pentium 3 since it was intended for running on XP. If I had a Pentium II 233Mhz I would have even tested for slower hardware but i didnt have that available and at 700Mhz Pentium 3 there was some added latency in the game as for the laptops 5400rpm drive wasnt that fastest and when the database was doing heavy read/write processes it caused requests to line up line a traffic jam and then refresh.
If you have a heavy read/write process with the server you could even mount the database and server into a RAM Disk in which a portion of system RAM is allocated and acts like a hard drive. Everything happening in this RAM Disk is 22x or faster than a SSD. I had a game server that was heavy with read/write processes and mounting all this into a RAM drive made it all lightning fast for database updates and got rid of lag between clients connected to it as for the hard drive was no longer getting battered with read/write requests, it was all happening within system RAM where getting data to and from the CPU is the fastest.
Here is the one that i have used and it works really well. There are many others out there as well, but the free one at the bottom of the page I have used before, but its limited in capacity, but if your database fits within the limited size then you can have a super fast database for free.
http://memory.dataram.com/products-and-services/software/ramdisk
