Real estate prices are continuing to rise. In some metro areas, the cost of buying a home is quite high compared to household income. Thus, it is not surprising that many buyers, particularly first-time buyers, are looking for ways to save money on their purchase. One option for finding a lower priced home is to search for a fixer-upper. However, a fixer-upper should not be purchased on a whim—it is very important to take your time and select the right one to ensure that you don't make a huge financial mistake. Consider the following things to help you select a quality fixer-upper:

Choose the Right Location

When it comes to fixer-upper single-family homes, a good rule of thumb is to try to find a home that needs work but is located in a desirable neighborhood. Prioritizing location is a great way to ensure that you will see a big boost in equity after you remodel and make improvements to the fixer-upper that you purchase. If you are not able to afford a home in a prime neighborhood, try to focus your search in an area that is up and coming and is expected to see a lot of growth in the future.

Avoid Homes That Need Major Repairs

If you're interested in buying a fixer-upper single-family home, your best bet is to avoid houses that need major repairs. For example, if a house requires a whole new plumbing system, has a failing roof, or has significant foundation issues, it is a good idea to pass and look for something else. Ideally, you should try to find a fixer-upper that needs cosmetic upgrades, such as new flooring, new countertops, some paint, and new landscaping. Homes with cosmetic issues typically do not cost as much to upgrade as those that need major repairs as well as remodeling.

Pay Attention to the Layout

A home may need some work to make it fresh and modern, but if the house has a good layout all of the work is worth it. You may be anxious to make a home purchase, but when you're buying a fixer-upper it is in your best interest to be patient. A fixer-upper with a good floor plan will have ample storage, open spaces, enough bedrooms and bathrooms, and plenty of natural light. 

These are just a few things to keep in mind when buying a single-family home. Contact real estate agents to learn more.