We liked Hotel Mingood. Fits your bill. Check the reviews though first.
#2 chinarocks has been a member since 17/6/2011. Posts: 738
the Mingood is a (Budget)-Hotel and not a guesthouse.
and the rate will be rather 30-35$ than just 10$.
for 10$ you will not find anything decent in my opinion. Malaysia does not have the same good-value-for-money guesthouses as has Thailand, Laos or Cambodia.
If I were you (and if traveling outide of the peak season), I would just go there and explore the options at LORONG LOVE and LEBUH CHULIA, which is the Backpacker-...... ermmmmm....... "Ghetto" of Georgetown
#3 EurasiaTraveller has been a member since 18/10/2010. Posts: 12
I was just in penang & stayed at the old penang guesthouse. It is an old colonial building & very charming, but it can be a bit loud. ( my only complaint) I didn't stay in the dorm, so can't comment but the rooms were simple & clean & the shared bathrooms were new & spotless.
rooms are about 30 USD but you can get a dorm room for 8 USD. self serve breakfast & there is free wifi too. they are very popular so you will need to book ahead.
as an aside there is a great, cheap, local warang just down the street called angel cafe. good kopi pang ( iced coffee) and noodles.
have a good time in penang, I loved it.
The overall cost of accommodation in penang (georgetown) is higher than other parts of SEA, that's true. Maybe because it's a UNESCO heritage site, but that being said, food & transport are very cheap.
Why pay more for a bed? Try Tune Hotels.com-Downtown Georgetown. It is a "no frill" hotel but decent enough for a night or two. You can visit their website and book online.
I stayed there with my niece during our trip to Penang and we were satisfied. The beds were soft, the linens clean, and above all the location is strategic. Will stay there again on my next trip.