It's not going to be reasonable no matter where you stay. You're going to pay lots of money and get not much in return, sorry. I stayed at Art Hostel and it was ok. It was tiny and cramped but the location was great. During Carnival the prices are at least three or four times higher. Rooms are in such demand during Carnival that they can demand absurd prices and somebody will pay.

Basically, if you want to save money you need to find a couch to crash on or get a couple of friends and rent an apartment for the week.

You can also wait until you get there and hope for a deal by just walking into hotels and asking. It worked for my two friends but you run the serious risk you won't find anything, especially if you don't speak Portuguese.

Thanks for the advice! I probably shouldn't have included the word 'reasonable' in my description!! Im well aware of how the prices triple over the festa season but wanted to see if anyone had any insider advice before we just book something off of the internet. We both speak Portuguese well so that wouldn't be a problem but I definitely think we'll be booking something before we go.

The cheapest hostel bunk bed in a dorm is R$990 for the multi-night Carnval package. I would definitely book before you arrive, in fact, in July to have the best choice of location and quality. Most of the hostel booking sites do have reviews you can read, and also check TripAdvisor, Thorn Tree, Virtual Tourist and some other Brazil travel forums.