We spent two nights in Nerja three weeks ago at the Parasaio del Mar. It was everything you could ask for in a seaside hotel - beautiful location, nice rooms, helpful staff, right on the beach, relaxing patios and pool, better than average breakfast, etc. The only drawback I can think of is that you are not supposed to swim on the beach at the base of the hotel, but you should walk about 1/4 mile down the beach. Nerja is a wonderful town, especially the part east of the Balcony of Europe ,which is in the center of town. The western side of town is more developed, and is more typical Costa del Sol highrises.
Nerja was our favorite town in Spain, and we would gladly return.

I agree with zootsi; Paraiso del Mar in my opinion is the best hotel. If you are looking for an inexpensive hotel it will not be in the best location but Nerja is a fairly small town. Try the Perla Marina on the beach on the far west side.

If you are adventurous and are looking for a short term apartment you may want to wait until you are there to find one (if you are going the first part of June.) There always seem to be rental signs around.

Enjoy your stay. Nerja is our favorite town and we go there every year.

thank you so much for the information.

Out of curiosity - what's the issue with swimming in the water in front of the hotel? Is it privately owned? Is the water bad? Something else?

thanks