When writing a short-story or a novel, many things are still a mystery to me - which is not unusual because I am a beginners author. Recently, though, I started wondering the most about the location of a story. Should I invent it or go with a real-life city?
Obviously, there are many advantages to choosing a real city to be the center of the plot. Many readers can relate to it and see it in their mind while reading the story and following the characters around. It can also be easier to describe the surroundings and place since they already exist. The emotional atmosphere and vibe of the location is easier communicated to the reader if they know and/or have been to this place before.
But what if this works against you? Aren't the readers' expectations automatically much higher if they know or have heard about the place you are trying to describe? In that respect it might be better to invent the place of the plot and let the reader know only what you want them to know. Then it's mostly a matter of description detail and being able to translate your inner view onto the page. It gives the author more freedom which can sometimes - especially regarding fantasy novels - be key to a great story.
What I have found so far, however, is that novels (except for fantasy novels) tend to take place in real life places whereas short stories often have their plot taking place in unspecified smaller venues, like houses, cars or cafés. This is not to say that all of them do, of course. I merely speak of my general experience with the stories and books I have read. Now that I am much more aware of the craft of writing, I am also a better reader and I might keep track of the location of stories more.