There are currently two space stations in LEO in real life: the International Space Station and the Chinese Tiangong-2.
There are many ways to construct a space station and each way has its own pros and cons.
Constructing a station in orbit around HOM can prove to be problematic when the station gets longer than 3 or more modules. Perhaps the simplest method of construction in a Sandbox is to separately send each component to a point beyond the orbit of Earth, and connect the modules as they arrive at the construction location. A Station Builder Tug can be very useful during assembly.
The minimal distance from HOM to your station should probably be about 110 units. This is the approximate distance it takes to decelerate fully from escape velocity (Red Bar in the velocity indicator) and successfully maneuver the modules into their desired positions at a safe docking velocity. Many users assemble their stations at a distance of 125 to 200 units, then maneuver the station into its final position after completion.
Some space stations have a large supply of fuel, often stored in a Station Refuel Silo. This allows the station to travel long distances at top speed many times over, or act as a space-based refuel station for other spacecraft.
If a station is constructed for the purpose of exploration, it should have several engines aligned in at least 2 directions. This increases the maneuverability of the ship and its ability to start and/or stop. A large station is difficult to turn or decelerate swiftly unless it has an engine designated for that purpose. A space station that is meant to move should also be balanced, ergo, the mid-life of the ship (from bow to stern) should have symmetry on each side of the mid-line. This prevents the ship from spinning when accelerating forwards.
A Space Station can be made for several different applications which include:
- A Refueling Station for other space vessels
- A Recharging Space Station for other space vessels, whose batteries have been depleted
- A science/research ship
- A military/defense station
- A Habitation Station
Note: Since the actual construction of your station can be quite time consuming (unless you are using Quick Launches), you may wish to first make your own pre-build schematic, by using this: Space Station Blueprinting.
It can be a great help in visualizing what you're going to build, before you actually start building it. This helps to avoid construction issues halfway through building.