There are hostels in most touristed parts of Nicaragua. A bed in a dorm will usually cost around $5. If you’re paying any more than that you should probably be receiving some kind of extra benefit, like kitchen or pool access. The biggest, brashest hostels in Granada and LeÃ³n charge a little more and are a good place to get drunk/hook up with fellow travellers. The service at these places is usually pretty shit though. There are a lot of smaller hostel type places that charge less for better services, and in which the lingua franca might actually be Spanish not English.
The price for a private room in a simple hotel rises towards the $10 mark, per room not per person. Rates jump significantly if you want to use air conditioning. In Ometepe and the north you can stay at coffee farms for around $7 per person.
There are some pretty strict hotel operators around. Make sure you are clear on rules about drinking in your room and about hanky panky with locals.
Home Stays and Apartments in Nicaragua
Anyone planning on staying a little longer should have little trouble arranging a home stay; talk to local NGOs and tourist offices. Don’t expect your Nicaraguan mother to be the laid back type. She will be washing all your soiled knickers, whether you like it or not, and she will want to know who you are going out with, and at what time you will be coming home (alone).
There are some ridiculously nice properties that can be rented by the week or month, especially in the south around Granada and San Juan del Sur. Rates will be immense by Nicaraguan standards but low by most others.