Ahh - million dollar question, and it depends a bit on your strategy.
If you are talking about a reno for your PPOR, i really cant help you. Mainly because the area you want to live in will determine what house you buy - not what house will get you the best returns.
What is your strategy?
If you have never done it before, start small - really small. The first flip I did was a nice enough house, but the garden was over grown to hell. So basically we just cleaned up the garden then paid about $13,000 for a landscaper to finish the garden off nicely. Even then, we blew our budget, it took longer than we imagined, it took longer to sell etc etc etc etc.
You will discover expenses you could never have dreamed of.
Are you planning on doing the work yourself - or paying someone else to? If you are doing it yourself - stick to your strengths. Are you a professional painter? if not, pay one (or do a coarse or something). Are you a tiler? if not, pay one. If you are not a tradesman (like me)you are pretty well limited to the destruction part of the flip
(the fun easy bit) - then call in the pros. They will be able to do it better, faster cheaper than you will. Yes, you will have problems with tradies - but it will pale to insignificance in the long run.
But I havent really answered your question though, have I? Areas - I look for the older established areas which are growing. Areas like Tuart hill, Yokine, Wembley, Innaloo are all good - but often have higher capital outlay.
Hamilton hill, south lakes, south freo, freo, north freo, Melville, Bently - all have opportunities.
Again - depends on your strategy. If you are going to hold and rent - I like Bently because rents are high for what you pay. I used to like flipping in Rockingham/safety bay - but currently about about 1 in 3 houses are on the market and rents are dismal (I have a house on the market there if you want a newly renovated 2 story, big block, ocean views....
) sorry back on track.
Now days I cant even be bothered looking for houses, I pay a buyers agent to do that for me. So I have been breaking out of my comfort zone a bit recently. I cant recomend this method highly enough!!!
Hope this helps
Blacky