Smart location alternatives to Munich

Check out the Illertal (Iller valley) of the Oberalläu (Oberstdorf). Some of the best alpine scenery in Germany at a more reasonable price, particularly if you stay in one of the towns (Langenwang, Fischen, Altstädten, Sonthofen) below Oberstdorf.

Also, the area south of Munich served by the BOB (Bayerische Oberlandbahn), Kochelsee, Schliersee, Bayrischzell (except Gmund/Tegernsee, which in my opinion, are overpriced).

Lodging prices aside for the moment, many visitors share your interest in day trips via train to Berchtesgaden, Zugspitze and Neuschwanstein. But in fact, these places are quite spread out and are not very convenient from Munich itself. It's 5+ hours round trip to Berchtesgaden (and further to the Königssee and other sights that interest visitors.) N-stein is nearly 5 hours round trip on trains and buses from Munich. Figure 4 hours round trip to reach the departure point for the Zugspitze. If you stay in one of these destinations instead, it takes even longer to reach the others. Oberstdorf would mean 5 hours round trip into Munich and back as well.

For a good base town outside Munich, you might look into Prien, on Lake Chiemsee. It's mid-way between Munich and Salzburg (1 hour from each) and Herrenchiemsee Palace (Ludwig II) is there. From Prien, the train to Berchtesgaden and back is a 3 hour round-trip. Prien is only 15 train minutes from Aschau, a small town with a mountain lift to the Kampenwand peaks, an area that is popular with hikers and anyone who enjoys good views - like this one from the Sonnenalm terrace near the top of the lift.

Prien would be most inconvenient for day trips to N'stein and the Zugspitze, but very good if these other places interest you.

The Prien link above has extensive accommodations information under "booking."

If you're set on the Zugspitze and Neuschwanstein, I suggest you stay in that area for a couple of nights also. N'stein is a doable day trip from Garmisch or Oberammergau or perhaps other nearby towns.

looking for recommendations of more budget friendly venues/accommodations to consider that are convenient to transportation/tours outside of Munich,

Unfortunately Munich is probably your best bet for a home base to the places you mention. Can you give us an indication of what you consider budget friendly as we might have suggestions in Munich that will work. For example, my brother and I put on a budget Oktoberfest trip for 10-20 friends every other year and our rough itinerary is as follows:

• 2 days in Tegernsee Area, I agree with Lee that Gmund and Tegernsee itself are pricey but just across the lake is Bad Wiessee and rooms there are much more reasonable, we paid 100€/night for a double room with breakfast and you are still quite close to Munich
• 5 day in Munich staying at Motel One Ost or Motel One Deutsches Museum, last year the double rooms were 179€/night, Last year they they were not taking online reservations for Oktoberfest so you had to call the hotel and book directly. If they say they are booked on line just call.

I'll echo Russ as well that the locations you mention are not very convenient day trips from Munich and are scatterd quite wide making a single home base hard to recommend. In the last ten years the farthest anyone from our trips bothered to go was a bus tour to the eagle's nest and Salzburg. Personally I never ventured farther than the S-bahn zones or Tegernsee area as anything more just takes too much out of the day. There is plenty to see and do within an hour of Munich.

DJ

I stayed in Augsburg on my Octoberfest trip and really enjoyed the town. Check out the lodging options there. I think it's totally doable by train.
https://www.google.com/maps/dir/Augsburg,+Germany/Munich,+Germany/@48.2529504,10.9529052,10z/data=!3m1!4b1!4m14!4m13!1m5!1m1!1s0x479ea2c53a212b29:0x41e48add78be7a0!2m2!1d10.89779!2d48.3705449!1m5!1m1!1s0x479e75f9a38c5fd9:0x10cb84a7db1987d!2m2!1d11.5819805!2d48.1351253!3e3