Ordinarily it ought to be by the sea. However, The Grey Havens are a bit depressing and there are too many Elves around; and although it might sound exciting thinking about Wizards landing there you get the impression that any bored long-term residents would be moaning "You wait thousands of years here for a Wizard to come along and then five of them arrive all at once! Tch." Another option, Dol Amroth, is too far south and I think they'd get jellyfish and I really don't like the thought of that; plus it might get over-run by day-trippers from Minas Tirith on bank holidays. Alqualonde sounds just beautiful, but the name also sounds too much like a drug to deal with excessive water retention. So unless I could find a forgotten fishing village somewhere on the Western shores of Middle-earth then it has to be The Shire.
It's got nothing extreme about it, no overly large rivers that might flood, no volcanoes, not too many wars. It has some nice woodland and fields and whatnot. Plus it also has all the major things you might need in life like ale, cakes, pipe-weed, taters, coffee, books, maps etc. It has decent pubs. Not too troubled by Elves and Orcs and things though you get the odd Wizard or Dwarf. And what's more, you get presents when it's not even your birthday!
