First and foremost, we want monsters to be scary. Big fangs. Long sharp claws. Horns. Spikes. You get the drill. Tv and movies have given us all sorts of monsters and the special effects artists that have brought them to life. Stan Winston was one of my all time favorite artists ("Jurassic Park," "Aliens" and "Predator," to name a few). The challenge for the writer isn't so much to make these creatures look good as much as we have to make them believable. There's no reason to fear something that doesn't feel real. Take any classic monster from Dracula to the Yeti and you've got an instantly recognizable creature/antagonist to drive the tension and action for a story. But the story will lose it's momentum rapidly if you don't answer the following three questions before you start writing.
1. When does the monster's "big reveal" take place?
2. How much of the monster do I want to show off before the "big reveal?"
3. Why does this creature kill?
Planning the "big reveal."
Before you even begin to write the first chapter, you have to have the reveal scene of your monster in mind. It honestly doesn't matter whether this happens in the beginning, middle, or end of your story. Most reveals happen in either the middle or the end of the story. Honestly, that doesn't matter, as it's more an issue of style than anything else. What matters is that you treat the scene with the same level of effort and dedication as you do to the ending of the story. This is your one opportunity to send a clear message to the reader that "this is my monster and this is why you should be very afraid." This reveal not only sets the stage that leads up to the big discovery, it also sets the tone for everything that comes after it. It should feel like sitting out in the audience when the curtain is lifted up to reveal King Kong to the world for the first time.
Pacing and spacing out the glimpses.
How much you show of the monster before the "big reveal" completely depends on how you plan the reveal to take place. Is your monster skulking in the shadows, attacking when least expected, or hiding in plain site. These considerations are the next factors that you should think about when trying to create a believable beast. If your monster is as elusive as Bigfoot/the Yeti, then you'll need to provide the reader with scant images of the monster. This helps establish pacing and also creates reader investment. At some point, the reader decides that they have to finish the story because now you've made them want to see what the creature looks like. The same thing applies with monsters that are hiding in plain site. Remember, it's a monster. It's dangerous. It kills people. It's not normal and, therefore, may not know how to completely act "normal." By leaving imperfections in this type of monster's camouflage, you create tension within the reader and increase their investment in the story. They'll want to know when one of the other characters pick up on the abnormality or trigger the "big reveal." With either type of monster (elusive or a social hunter), the pacing and spacing of the glimpses of the creature are import aspects for building and maintaining tension.
Bringing sense to the violence.
Establishing your monster's motivation for killing off the characters in your tale is critical. Yes, bad things can happen to good people and there is such a thing as random acts of violence. If those two notions are key components for the rising body count in your story, you may risk losing your reader's suspension of disbelief. Are your characters being hunted because they've stumbled into your monster's feeding grounds? Did they inadvertently disturb an ancient burial site? Have they come too close to discovering your "monster's" real identity and now must be silenced? Understanding the reason(s) behind the violence lends to making your beast all the more believable. For example, if you are writing a tale involving a werewolf who is seeking revenge against the grown up high school kids who tormented him years ago, this will take you down interesting plot twists and themes dealing with the lingering effects of bullying. It may also help explain, at some point, why your werewolf attacked some people and not others. This creates a far more terrifying werewolf: Instead of an unthinking marauder that kills everything in sight, now we're dealing with killings that are due to pent up, calculated rage.
These three topics are parts of the puzzle for putting together a good horror story. Of course character development, dialogue and the other aspects that make up good writing are important as well. Your monster is just as important as the hero and should be as well thought out and developed. Like the hero, the monster is a plot device and should move the story and be the driving force behind the conflict. Whether the beast or the hero wins at the end of the story is your decision.