This may be sort of cheating, but I like thinking of the setting as another character. I've seen writing advice that indicates that weaving the setting as its own character creates benefits within the story. I'm still trying to get my mind around that particular piece of abstract thinking, but I think I generally like the idea. Also, it gives me an excuse to touch on my basic setting with you all in this series of posts. (Setting Closeup didn't have as much alliteration, and therefore gets -5 on the Writer Cool Tools scale).
The early chapters of The Binder's Daughter take place in a fictitious Hebron, Indiana. If you consult a map, you'll find the real town in the upper northwest corner of the state. It does exist. I actually grew up in nearby Valparaiso.
I chose Hebron for many reasons. First, and foremost, it's a place I know. My mother was born there, and I still have a lot of family that live in the town. Write what you know, they say.
Second, I wanted to a traditional mid-western town. Hebron is big enough that you'll find it on the map, but still retains a lot of that stereotypical small town feel. In the book, I shrink it a bit more. I think if you were to actually go there, it probably seems a bit bigger than I describe, but not ridiculously so. Last I checked, they still only have on McDonald's.
Michael choose to move there for it's proximity to Chicago (he was raised in an unnamed suburb), and it's general remoteness from most everything else. It's a quick hop away from the interstate, allowing him to travel easily, but it still retains a bit of a buffer from city life. In short, it's a great place to live if you want to be near things, but not too near.
There are also plenty of old houses in the area. It wouldn't be uncommon to see a large, Victorian house sitting at the edge of a cornfield on the outskirts of the town. People would respect his desire for privacy, too. I'm sure there would be gossip, but there's always gossip in a small town.
My favorite scene involving setting to write in the book was the one where Michael goes for a walk and first discovers Kiara's home. You may have noticed that it's a thinly veiled, literal tribute to Robert Frost's The Road Less Traveled. I was always a fan of Frost's poetry, and that crops up a bit in this novel. It was fun trying to weave the work into the narrative structure of the story, and I think it provides a nice visual representation of the cross-road where our main character finds himself. The spirit of the poem fits.
The other settings I use in the story include Lhasa, Tibet China, and Bonn, Germany. There's a small bit in Chicago as well. Of all the settings, I think Hebron asserts itself the most on the story, contributing a lot to the early feel. Obviously, it is the one I'm most familiar with. Most of the others were written utilizing a lot of Googling. Except for O'Hare. Been there, done that. Numerous times. A couple layovers will have that place etched into your brain.