This is a very charming, quaint hotel, but here are a few disclaimers:

1. The hotel is built up a hill on terraces with NO elevator - so if you can't manage (at minimum) 2 to 6 flights of stairs, stay somewhere else.
2. There are only 10 rooms, and the top two rooms (#9 & 10), while spacious and with outstanding ocean views, have NO air conditioning. Keep this in mind if you plan to book in May-September. The winter months should not be a problem.

However, the limited number of rooms makes for a quiet locale, just one block from Playa Los Muertos and the Blue Chairs Beach - where you can get a free chair and palapa as guests of La Terraza!

On our last trip (May 18-25, 2010), we stayed in Room #7, four flights up. The partial ocean view was great, and the amenities in the room - coffeemaker, fridge, cable TV, in-room safe, A/C, ceiling fan - were fine. The toilets flushed and the hot water had good pressure. There is only a partial wall between bedroom and bathroom, just FYI.

We can recommend Room #8 which was next to ours. Both share a common terrace but #8 also has a corner view and the room includes a toaster oven and microwave. (Our room was a bit smaller with less counter space.)

Another good room is #4, two flights below ours. While you don't have an ocean view, it is a two-room mini-suite with separate living and bedroom areas, and there is a door to the bathroom. It is also easier on the legs, given all those stairs to #8!

Prices are outrageously cheap - we paid $55 per night, taxes included. The management has a "laid-back" policy so don't expect a personal valet or concierge at your beck and call. This is Mexico, after all - they get to it "manana."

However, the maids did clean the room thoroughly and provided us with extra towels at our request. There is a convenience store just down the block for essentials (coffee, juice, water etc.) to store in the room. The bed was actually quite good, unlike other Mexican hotels.

This place is not for everyone. If you are a fussy traveler looking for a big hotel with a pool, room service, spa, hot tub and "action," this ain't it. But if you are a laid-back traveler looking for a place to let the world pass you by, give it a try.

We booked the room here after friends had stayed here the previous year and they loved it!
We reserved room 4 which was high enough from the street level, the web site did not do it justice to be honest, large room, shower and comfy bed, coffee maker and little toaster, not we used it as the meals are great value especially along the malicon seafront.
we had our laundry done every 2 days and we had them returned the same day all pressed and lovely.
After reading the comments about the steps, they are correct there are lots of them but a very small price to pay for a lovely safe and enjoyable stay.
We will be going back same time next year and will be staying there again!
Highly recommended.......

What I like about La Terraza is that it is in the quieter part of town. After the hustle and bustle of the daytime activities, it is nice to stay in a place where you can sleep undisturbed even during the day.
The place is also secured. The big iron gate is locked at around 8pm and you would need a key to get in and out of the hotel.
It is just a block away from the beach. It is also close enough to the main strip of town where you can find the clubs and the restaurants. The price of course is cheaper than what you would encounter in the marina district.
We got Room 1 which is on the lowest level of the hotel, ergo less steps from the street. It is a farily large enough room that accomodated 2 beds. The bathroom is large. It also has a safe where you can keep your valuables that comes with the room. The room has A/C and a ceiling fan - AC is not powerful enough to really keep the room cooled - but with the combination of the fan, it makes the temperature comfy (wonder how this will fare combo will fare during the extremely hot summer days??)
My only complaint about the room: I slept in the bed close to the door, under the ceiling fan. Somehow there seems to be a constant 'shower' of what looks like termite dust - the beam on the ceiling has a crack and perhaps the vibration caused by the ceiling fan pushes these dusts out? I pointed this out to the manager and he said that he is more than willing to move us to another room if we so desire. Given that the choice is climbing more steps, we declined. It is not really that disturbing but just makes one wonder if that beam is ready to cave in.. Suggest a termite job QUICK!!!
Added bonus: there is a cafe on the street level (not owned by the hotel), that serves very cheap and good breakfast menus. There is the OXXO store just around the corner that is open 24 hours a day (just like our 7-11).

We enjoyed our stay immensely....staff was beyond helpful and accomodating. Being built up the side of the hill, there are many steps, but that I think is only a problem for those who would prefer the lazy way out and not enjoy the truly unique and quaint attributes of La Terraza. They include a breakfast/lunch restaurant on the street level, several really inviting public spaces with chairs, tables, candles...a great place to relax, read, meet other guests.
The entire place is lushly planted with tropical plants, an oasis from the concrete and dust of the street. Each morning, several species of birds came to feed in the trees and these were not the ubiquitous screechy black birds so common in Vallarta.
The rooms were large and good....pretty much the same as most rooms you will find in the zona romantica.
Stay at an "all-inclusive" in Nuevo Vallarta if you want antiseptic rooms, elevators, impersonal attention and an americanized vacation.
Stay at La Terraza for an intimate, convenient, quiet and relaxed vacation in a quaint little inn that climbs the hillside.
We will be back each year. For us it's a gem and inexpensive.