Managaua has really only one decent hostel: Managua Backpackers. With both 8$ dorms and private rooms, this hostel is the most preferred overnight stay in Managua. It has a shared kitchen and nice outdoor swimming pool. It is located in a very safe and central neighborhood (easy access to groceries, mall and Tica Bus). About 30 minutes from airport a transfer can be arranged.

Before getting to Managua, we heard about some pretty horrible taxi scams targeting backpackers. The tied up and left on the side of the road type stuff wasn't the least bit appealing to us. We were on our toes the entire time we were in Managua and always made sure to take only licensed taxis. You can tell which taxis are licensed by checking their license plates, which are white with a red border on top and bottom. Generally speaking, I would avoid taxis with tinted windows. Lock the doors when you get in and, if you feel it necessary, refuse to share your taxi with others.