You can't do better than this location, it's in the middle or almost everything there is to see in Madrid with just a few exceptions.
Most tourist places are close and there is the CHUECA station very close by.
The rooms are small but comfortable and the shared restrooms are cleaned every day.
Now the area is generally safe 24 hrs a day but as a loca lfriend told me there have been some new migrants around town so in case someone speaks to you out of nothing and don't look spanish just ignore them and go on your own. I lived in Spain for a whole year and never had any issues but this last time it got weird so just be mind of people.