When considering the setting for your story you turn to atmosphere. What mood do you want to give your work? If you require a spooky setting, you may be inclined to set your story in an environment that most would find unnerving such as a disused factory, an isolated house, a museum at night etc… If your novel is a romance, then perhaps an elegant European hotel on a lake might do the trick. Although….
Challenging Your Readers’ Preconceptions
…You could think about capturing your reader’s imagination by turning settings on their head. In Alex Garland’s book, The Beach, he took a paradisiacal environment and made it a hellish place, as did William Golding in Lord of the Flies.
Likewise, you could take a grim, poor council estate riddled with crime and drugs and set a love story there. Endear its readers by accentuating the positives in the ugly setting (sense of community spirit, humour etc…).
Surprise and challenge your readers’ preconceptions, it will make for a memorable tale. Why not take a suburban house and people it with elves to create a Fantasy novel. What about an action thriller set around the world of chess? Or yoga? Horror often works all the better when set in a mundane, everyday location rather than Dracula’s Castle. Think outside that castle.