With its steep, winding cobbled streets and historic mansion houses, the hillside neighborhood of Santa Teresa is one of the most appealing places to stay in Rio de Janeiro. And what it lacks in easy access to the beach, it more than makes up for in lively bars and restaurants, as well as the many welcoming and relatively well-priced, guest houses to be found here.

Santa Teresa is one of the most charming neighborhoods in Rio — Photo courtesy of Rogerio Zgiet

The once-crumbling colonial homes that abound in Santa Teresa make perfect pousadas (bed and breakfast guesthouses). And our pick of a substantial bunch is Casa 579, which offers guests a boutique hotel experience at budget-friendly prices.

Those on really tight budgets can stay in attractive dorm rooms that offer a lot more space and comfort than the norm - think comfy single beds with nightlights and bedside tables rather than cramped bunks - while those with a little more cash to splash can relax in one of the double rooms, each of which is themed around a different Rio samba school.

The stylish, spacious lounge areas earn more brownie points, but the real crowning glory at Casa 579 is the roof terrace. It offers a spacious pool and sun loungers as well as some of the best views to be seen anywhere in the city. Take in the sights of the Christ statue and Corcovado Mountain as well as Sugar Loaf; it's hard to imagine a more impressive backdrop for an early evening caipirinha.