Overall Rui's place is lovely! We were supposed to stay three nights as part of our honeymoon.
Check in was a breeze. Rui's friend Marianna met us at the Fado museum without hitch. The house itself is definitely small- but extremely clean and well decorated. Very comfortable.
We were not made aware of a festival happening the week we were there. The festival was beautiful and fun to explore for a few hours, but nothing we wanted to sleep above. It was VERY loud (there's a speaker blasting the live music into the street below...attached to the house, right next to the Kitchen window). The party (of thousands) lasted till 3am.
Rui was very reasonable when we brought this to his attention. We noted how cool it was, but that we, personally, wouldn't have booked if we had known (I'm a super light sleeper and we had day trips booked each day to wake up for). Rui refunded us for our additional days without complication, and even offered to help us find a new place.