Renovating can be a daunting task, not only in what's involved, but also in the money you're spending. Read on for some tips on which Australian suburbs get the best returns and how to ensure you're getting a good deal.

The recent onslaught of home renovation shows is a symptom of the reno fever that is currently gripping Australia. The nation held its collective breath during the nail-biting auction that marked the end of eight weeks of hard labour put in by the four beloved couples on The Block 2011. Now that it's all over, homeowners around the country are keen to renovate their own properties.

But not all home improvements are created equal. In fact, some seemingly positive changes can actually lower the value of your home when it comes time to sell. The city and suburb in which you live can also have a major impact on your return on investment. Before you sink your hard-earned dollars into renovations, it's a good idea to ensure the work you undertake will get you the highest possible profit.

A recent study conducted by ServiceSeeking.com.au analysed the areas of Sydney, Melbourne, Brisbane, Adelaide and Perth that had the highest returns on investment from home renovations. They looked at median house prices for renovated and unrenovated properties listed on Realestate.com.au and at renovation quotes offered on ServiceSeeking.com.au.

In Sydney and Brisbane, the east offered the highest returns (23.6 per cent and 36 per cent, respectively), while the north was most profitable in Melbourne (24.1 per cent) and Adelaide (26.5 per cent). The top returns in the country were in the south of Perth (38.9 per cent).

Does this mean you shouldn't bother giving your home a makeover if you live in a suburb with a lower profit margin on renovations? Not at all. You simply have to choose your renovation jobs wisely and shop around for the best quote to avoid overcapitalising.

According to ServiceSeeking.com.au, the key improvements homeowners should focus on to make the highest profit are bathroom and kitchen renovations, new flooring and a fresh paint job throughout the home.

Take the case of Jennifer, an experienced renovator who wanted to update the bathroom in her investment property in Sydney's west. The rusted bathtub and mouldy tiles dated from the '70s and were in desperate need of an upgrade. She posted her job on ServiceSeeking.com.au and chose the best among five quotes. The renovations carried out by Angel Touch Bathrooms included ripping out the old bathroom, putting in new plumbing, levelling the floor, rendering and tiling, waterproofing, installing fittings and fixtures, and electrical work.

The new bathroom cost Jennifer $12,000 and she chose to remodel the laundry in the same style for an additional $4000. Even though her unit is located in the least profitable area of Sydney and she spent more than the $13,123 average spent on renovations in the west, she still stands to make gains of 12.3 per cent if she sells. Overall, she felt it was worth the expense.

There's no right or wrong when it comes to renovating. But if you're after the biggest bang for your buck, get quotes from several tradespeople and focus on upgrading your bathroom, kitchen and floors as well as giving the place a fresh coat of paint.

It's also worth looking into refinancing your home loan when you start thinking of renovating. It can free up some cash for you to work with, and possibly save you money in the long run by lowering repayments or helping pay the loan off faster. Some banks, such as HSBC, even have Refinance Managers who guide you through the process, helping you to avoid fees and making the switch to a lower rate easier.

Looking for more renovation advice? Check out our renovation section.