Almost everyone day-trips from Kathmandu, so the real choice is whether you sleep inside the ticketed old city and get the squares at dawn, or outside it and pay less.
Inside the walls — Taumadhi and Durbar Square
Guesthouses in restored Newar houses right on or beside the two main squares, with rooms running from about NPR 800 to NPR 5,000. You get the old city before the coaches arrive and after they leave around 5pm; expect steep narrow stairs and temple bells at dawn.
Dattatreya and the eastern lanes
The oldest quarter, ten minutes' walk east of the main square, around the woodcarving workshops. Cheaper and much quieter than Taumadhi, and you wake up in a working neighbourhood rather than beside a photo stop.
The west gate and Siddha Pokhari
Where the Kathmandu buses and taxis stop, five minutes' walk from Durbar Square. The least atmospheric base and the easiest if you are coming and going, with the cheapest rooms of the three.
Practical: Nagarkot as an alternative base
Nagarkot sits 32km from Kathmandu and about 40 minutes uphill from Bhaktapur, with hotels across the price range and the Himalayan panorama at dawn. Plenty of people sleep up there and drop into Bhaktapur for the day, which works — but it means paying the city ticket as a visitor rather than living inside it.