Colors Hostel is run by a vivacious Argentinean man and is comprised of 9 rooms. Four rooms have balconies that overlook Fuencarral, a trendy street strung with designer clothing shops leading all the way to Chueca.

The attractive two-star Hostal Barrera sits long Calle Atocha, within walking distance to the Museum Triangle and Atocha station.

In a building stacked with hostals in the Huertas district, the stealthily-attractive Adriano sits just waiting to be discovered for its unbeatable style and rates.

Hostal Alaska is widely recommended. In addition to being one of the best bargains in town, it's also an inarguably good place for history buffs.

Located in Salamanca north of the center of Madrid on the most fashionable street in the capital is the 17-room, family-run Hostal Salamanca.

We like Hostal Asunción for its non-touristy location, plus rates are reasonable for services rendered, and include free Wi-Fi.

Hostal el Catalán is to hostals what Levi's is to jeans—it's an established brand that has so passed the test of time that there's no questioning its consistency or value.

This two-star hostal sits directly above Gran Vía, in a building jam-packed with other hostals.

Late night festivities are encouraged here, but raging parties on the streets of Chueca stop at the door—Hostal La Zona prides itself on class and safety.