Domingo's place was a great choice! Located in a lively area, it is close to the main museums and in a walking distance from important places in the city, such as Puerta del Sol.
Domingo was very helpful and present, helping us with tips and suggestions in the city. The neighborhood is full of bars and restaurants, opened until later at night.
The house is very comfortable and clean. It doesn't have air conditioning (which might be a problem) but it wasn't too hot (we stayed there in June, when the weather in Madrid is heating up).
I would definitely recommend it to people traveling in a group, the apartment easily accommodates 6 people.