It is perfectly located in the Albayzin area. The hostal has family atmosphere. Owners are very friendly and helpful. Although they do not speak English they are trying to help each of their visitors and explain them what to do in Granada, how to get to Alhambra etc. We came by car and it is impossible to get to the hostal on your own. We had to call the owners and they came to collect us and navigate us through the narrow streets of Albayzin. And the parking is true adventure. On the roof of the hostal there is a kitchen area and large teracce with stunning view on Albayzin, Monte Negro, Alhambra etc. The negative for us was that our room was dark and with the window leading to other teracce, so not really comfortable for leaving window open. But if you don't mind sleeping while air-conditioning is working, you will be ok. If the hostal is full, it can be quite noisy, we were disturbed by showers and toilets next door.

A small hostal in the historic Albaicin quarter of Granada. We liked its intimacy and the amazing hospitality of the owners who treated us like long-lost relatives. The owners don't speak English but coped with my garbled Portuguese and hand-gestures admirably. The room was on the small side and basic (what you would expect for the price) but as it had a patio with amazing views of the Alhambra and Sierra Nevada this really didn't matter. Also washing facilities. Spotlessly clean with the owners bustling about every day (they don't live there) making sure everything was in order. Because the owners aren't resident I did have to ring them on arrival outside the hostal but they were there in 5 minutes. Not a good venue if you hate climbing hills - its right on top of one with an energetic climb back up every time you return from 'town' but well worth the effort because the hotel is in the most atmospheric part of Granada. Don't be put off by the Rough Guide suggesting the Albaicin is akin to the Bronx - it is completely safe, even at night when there are plenty of locals on the street and in cafes (enjoying themselves, not snatching bags and mugging people!).

Staying at Hostal Moni Albayzin was a wonderful experience. If you've come to Granada to experience Moorish Spain, then this place is perfect. It's set in the winding streets of the Albacin, and there is a beautiful little square, Plaza Larga, just round the corner, with three good bars/restaurants. You can walk down through the Albacin to the main centre of Granada in about 10-15 minutes.
The Hostal itself is cool, with air-con in most of the rooms, very clean, and is in a quiet location. There is stunning Moorish decor throughout, and a leafy roof terrace with dramatic views across Granada, breakfast here was a real delight.
The lady who runs the Hostal does not speak English, which I knew in advance, but I spoke to her on the phone the day before I arrived to confirm our arrival time with the help of an interpreter at her end. I was then amazed to find that she had come out to meet us on the main street (the Hostal is in a pedestrianised area) at our arrival time, which was about 11.30 at night. She and her husband (I presume) were very friendly and hospitable throughout.
In summary, I cannot recommend the place more highly if you want a genuine slice of Andalucia. However, if you prefer the sanitised experience where everyone speaks English and there is a Starbucks round the corner – then go somewhere else.

good points-

location was lovely - can't recommend the Albayzin enough for atmosphere and sights

the proprieter and her husband were extremely friendly and accommodating

the price was extremely reasonable

bad points

the proprieter did not speak a word of English, which given my very limited Spanish was difficult to navigate.

The included breakfast was use of a kitchen on the top floor of the house - make your own coffee etc. didn't suit me although it might suit others.

price changed from 63 euros on-line to 65 euros when I paid up.

directions on website to hostal were NOT accurate (there IS no "Albayzin" stop on the 31 bus). Ensure you have an accurate map before attempting to find it!!!

proprietors were not there when I arrived so had to call on mobile phone and of course, they did not understand my limited Spanish, which made it quite awkward. they were not around in the morning as well so timing my day to catch them to pay up was tricky.

that being said - if you can deal with those things and want a low maitenance and reasonably priced place to stay in the Albayzin, it's worth it. Just make sure you are ready to deal with the language difficulties and are quite independent.