Myself and my brother were in Madrid on business and sightseeing. The only concern we had was location but that turned out to be irrelevant. As it happens the tube system is a fantastic, cheap and right on the next block. We had no trouble visiting the Bernabau, museums and everything that's great about Madrid.
Bike hire is five minutes walk away http://www.rutaspangea.com/ so we explored the awesome landscaped riverside and Retiro park.
Pilar is a wonderful and welcoming host. We were picked up from the airport and shown around the apartment and local area. The apartment is very spacious and has pretty much everything you will need, loads of local stores, bars and food etc. The restaurants in the area seem to be frequented by local people and so are non tourist and really friendly.
We usually spend Christmas in Palma but I am already planning to come here if we can.
There were only two of us but if theres a group of you there should be no hassle with bedrooms. three double, spacious clean spaces with towels, bedding etc. All separated by rooms, so no adjoining walls with a central lounge and roof terrace. fully equipped kitchen and bathroom.
I have used Airbnb a few times and this is what its all about. Really good quality accommodation that makes staying in a hotel pointless.