Kamelya Hostel is an amazing place to stay in Cappadocia. They are located a short 3 minute walk from the bus station and city center. Their rooms are super affordable, nice, and cozy (I opted for the private room and private bathroom), and most importantly, the owners Volkan and Ahmet and staff are all kind, friendly, and make you feel like family. The complimentary breakfast was delicious with eggs, meat, veggies, fruits, bread, etc.
They also have the most affordable and best shisha/hookah in town!
***Balloon Tours etc. I highly recommend booking all tours and balloon rides through Kamelya hostel when you arrive. They have the best rates and they know the best companies so that you don't get ripped off.