There are four main locations to install neck-side strap buttons. Mounting one on the treble side of the heel is easy and not terribly invasive, and the strap wraps around the heel, pulls the guitar toward you, and doesn’t get in the way of upper-positionfingering. Installation on the heel cap—or on the back of the guitar near the cap—is also easy to do, but I don’t like it because the guitar tends to fall forward, and, in some cases, the button can keep the guitar from nesting properly in its case. Installing a strap button in the shoulder is a bit trickier and invasive, but I like that spot best, because the guitar hangs comfortably, doesn’t fall forward, and balances really well. I typically install the button centered on the shoulder, and about 2" out from the heel.
Once you’ve chosen your spot, use an awl to indent the wood so the drill bit doesn’t wander off center. Of course, when you’re going to drill a hole into an acoustic guitar, it’s important to use the right drill bit. I use a different size drill bit for mahogany than for maple (the two most-common neck woods), as mahogany is much softer than most maple. Choose the drill-bit size carefully, because it’s easy for the heel to split on a mahogany neck, or for the screw head to break off in the heel of a maple neck. (Maple necks don’t tend to split because the wood is so dense and hard). The drill bit diameter should be comfortably larger than the core diameter of the screw, so that only the screw threads bite into wood.
Strap button installations are easy on guitars with wide neck blocks—the internal wood piece that the neck is glued into, which also holds the top, back, and sides together—because the mounting screw will pass through the thin side wood and thread solidly into the neck block. But plenty of neck blocks aren’t wide enough to accommodate the screw. If this is the case, you can put a small (t" x t" x 1e") reinforcement block on the inside of the guitar, glued into the corner where the side and neck block meet. There’s no tonal reason not to put a reinforcement block in there.
Before installing the screw, lubricate the threads by rubbing them on bee’s wax, paraffin, or a candle. Screws thread in much easier when waxed. For a heel mount, use a leather or felt washer to avoid blistering the finish where the flat strap button meets the curve of the heel.