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Rome: location - Historic Center vs. Just outside Vatican?

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I have a few choices at which to stay for my four nights in Rome and can use some advice. I am traveling alone, though I have a friend of a friend in Rome who I will be meeting for at least one get together. I am looking for a blend of seeing a few sites (in particular want to see the Sistine Chapel, Borghesse, Spanish Steps/Trevi Fountain and the Piazza Navona), but also want to just wander around and enjoy being in Rome, having caffe or gelato and watching the world go by.

I have a choice of staying in a roof-top apartment with a little terrace just a few blocks from the Piazza Navona (off of Via del Governo Vecchio), or in a B&B type room and bath en suite with a family next door (though the room has a separate entrance) near Vatican City/on the other side of the wall near St. Peter's (described as Piazzale Gregorio VII). The cost is a little less expensive for the apartment, but pretty similar either way. Both situations get rave reviews.

The apt has the added benefit of washer/dryer and kitchenette, plus a hammock on the terrace. The B&B has the benefit of breakfast (a nicer breakfast brought in on the weekend and basic coffee and bread voucher on the weekdays) and having the owners on site in case I need something.

I am a fairly self-sufficient person and will have been in the country for a week by the time I get to Rome. Any insight or opinions into staying in either of these locations would be appreciated!

Grazie!

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