Defect-free SiGe layers and virtual substrates are of great interest for SiGe heterostructures and device processing, To overcome the problems arising from strain-induced defects, local growth of Si and SiGe on a micrometer scale with ultra high vacuum compatible shadow masks can be used. The geometrical shape of locally grown SiGe mesa structures was investigated by scanning electron microscopy. This reveals a facet formation like in silicon, which can be explained by a self-organized growth mechanism. The defect density can be observed by transmission electron microscopy analysis. A decreasing defect density for decreasing mesa width is found. Growth exceeding the critical layer thickness for uniformly deposited layers is possible for locally grown mesa structures. This effect can be explained by suppressed nucleation and suppressed multiplication of defects. MicroRaman spectroscopy measurements of these local structures can be used to investigate the strain relaxation. For locally grown SiGe on a (001) Si substrate the formation of dislocations is suppressed resulting in increasing strain. In contrast to this locally grown SiGe on local Si buffer layers is defect free, but reveal strain relaxation for micron dimensions. This effect of defect-free elastic relaxation offers a new method to fabricate virtual substrates, with buffer thicknesses on a nanometer scale.