Restaurants outside the city center tend to draw a more diverse set of patrons than those in downtown. A tasty and low-priced lunch can bring together grandmas, office workers, local thugs, and tourists alike, as evidenced at lunchtime in Rákóczi restaurant, located in Budapest's outer District 8. The restaurant overlooks Rákóczi Square, an area once known for its grimy streets, rampant prostitution, low-life characters. Today, there's a glitzy subway stop beneath the square and the neighborhood is rapidly gentrifying (pop in to Csiga Café across the street for proof).
Rákóczi is far from serving the best goulash soup (€2) or beef stew (€6) in Budapest, but thanks to the local patrons, the place feels more authentic than many restaurants that advertize themselves as "traditional Hungarian." You can't go wrong with the crispy veal schnitzel (€9), and I always finish my meal here with a couple of túrós palacsinta, crepes filled with sweet cottage cheese (€1). During the warmer months, try to score a table on the outdoor terrace. After your meal, visit the Rákóczi Market Hall across from the restaurant—it's one of Budapest's five historic indoor markets; time has stopped here in around 1980.
Locals from the neighborhood, and some tourists.
Goulash soup, veal schnitzel, daily specials, and cottage cheese filled crepes (túrós palacsinta).