This place was amazing, easily the nicest Airbnb we've ever stayed in. The owners were quick to respond and very communicative and friendly. Check-in was a breeze, and someone was waiting when we arrived to give us the key and show us around. Since we were staying for more than a week, about halfway through the stay they sent a housekeeper over to give it a full clean, returning the place back to the super clean state it was in when we arrived.
The apartment itself is really pretty with hardwood floors, nice furnishings, and two huge balconies. One balcony overlooks the city, and the other in the master suite looks right onto the palace. At night the view is like a postcard. The master suite is large with a really nice bathroom, and the dining and living areas are large with plenty of seating for the 6 of us. The kitchen is spacious by European standards, reasonably well equipped, and also included a washer and clothes lines in the court yard. Upstairs is another bedroom with a double bed, and a bedroom with 3 singles which would be good for kids or a couple. There's a full bath up there which is a little funky in terms of space, but otherwise functional.
The location of the apartment is also excellent. You're not immediately in the touristy area, but a 5 minute walk to the palace and opera, a 10 minute walk to the Temple of Debod and the park, and about a 15-20 minute walk to other major landmarks like Plaza Mayor, Puerta del Sol, and Mercado San Miguel. You're also about a 10 minute walk to Principe Pio station for metro and light rail, and there are a number of grocery stores and local restaurants and bars in the neighborhood.
I would highly recommend this place for basically everyone, with one caveat. The apartment is two floors, and the staircase is pretty wide open (i.e. not much of a handrail, and on only one side), so if you're traveling with kids under 3 or so, that could be an issue.