I stayed here in late October. The owner & manager, Maria, is very warm and friendly, but it felt the whole time like I was staying in the private home of a host family (albeit a pleasant one). In the evening, the TV was blaring, family members were having loud conversations in the hallways, and other travellers were nowhere to be seen. The room I stayed in itself - a private room with a shower and a sink (toilets were down the hall) - was clean and efficient, although fraying at the edges a bit, with faded sheets and discoloured wall paint and bath mat. There are no common areas (kitchen, lounge, whatever) to meet other travellers, so if you look forward to that as part of your backpacking experience, you will be disappointed. But the location is unbeatable - steps away from Puerta del Sol metro, centrally located downtown, and walking distance to everywhere.
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