I've been thinking lately about real settings vs. fake settings, as well as all the possibilities in between. Here are some options for some places for your characters to make their home sweet home:
1. Totally and completely fake. Like in sci-fi, where you can set your action on a different planet.
2. Fake place inside a real one. As in Emily Wing Smith's Haven, Utah in The Way He Lived.
3. Fake place based on a real one. For example, Ladybank in Boy in the Burning House is loosely based on Perth, Ontario.
4. Real place, complete with street names and actual buildings.
There are lots of advantages to making stuff up. You don't have to go and do the research. Very convenient if you don't want to travel. You don't even have to worry about staying accurate because knowing how long it takes to publish, chances are details like store names and street names will change by the time your book gets out there. You can, however, make those details up to make your place seem like a real one. This is also convenient if your place is important to the story and you need certain elements of the setting to affect the characters in certain ways. For example, maybe your characters need to meet in a shopping mall that has a British tea shop and a Cambodian restaurant. You can just make up a random place that has everything you need.
For the book I'm editing right now, I'm setting it in a real place. I'm not too worried about travelling there in person (thank you, Google maps). I like that readers can recognize places they live or visit in real life. It gives readers something real to relate to. I don't know if one way of doing things is better than the other. Personally, though, I think it's fun to make my lies seem as close to the truth as possible.