This hostel in a large wooden villa has a killer view, tiny rooms and cheerful staff who go above and beyond. It's an old building, which means no lift and no soundproofing; if crowded it can get noisy. But it's fun and lively and an excellent base for exploring the island. Advance booking is essential.
The hostel is about 1km along a rough dirt track, well signposted from the harbour. If you have a ton of luggage, you can ask one of the ATV drivers at the ferry dock to haul it up. It also has 'sea cabins' just outside the hostel. Campsites nearby cost 120kr per night (limited space). Breakfast is available at the hostel, but there's also a good guest kitchen.