One of the great things about owning a home is that you can truly make it yours. Don’t like the carpet? Rip it out. Hate the tan walls? Paint them any color. Don’t like the wall between the living room and the kitchen? Tear it down (as long as it’s not a load-bearing wall)!

More homeowners are choosing to renovate their current space rather than buy a new home. Whether you’re updating out of necessity, personal taste, or a desire to build equity, it pays to research which home renovations deliver the best return on investment before you pick up that sledgehammer.

Questions to Ask Yourself

It’s great to tailor your space with home renovations, but keep in mind that these “improvements” can affect your home’s value. This impact can be positive or negative.

Not everyone wants, say, a sunroom at the sacrifice of their backyard space. Or a bathroom where there’s no separation between the toilet and shower (yes, we’ve seen it!).

There are, of course, tons of home renovations that can produce higher returns on investment (ROIs) for the money spent. That’s where you want to focus your time and attention.

Before you get that sledgehammer out, think about how long you plan to keep your home. If the answer is one to three years, you have these questions to answer before you start any home renovations.

• Will these home improvements be attractive to prospective buyers?
• Will these updates increase the equity I have in my home?
• What will my return on investment (ROI) be?

If you plan to stay in your home for a longer period, the questions are a little bit different:

• What do I wish my home had?
• What do I value the most in my home?
• What makes me feel relaxed in my home?
• Would these home renovations meet my personal needs?

The ROI Calculation

While home renovations can be a good investment, you can’t calculate their exact return on investment—aka ROI net—until you actually sell your house. It’s one of the limitations of ROI. At that time, the value of the project will help determine the home’s resale price and your net profit.

To calculate return on investment, take the resale value of the home renovation and divide it by the total project cost, including labor, materials, and any other associated expenses. That number is expressed as a percentage.

An ROI above 100% means you recouped more than you spent. For example, a garage door replacement that costs $4,672 and adds $12,507 in resale value yields an ROI of 267.7%. An ROI between 0% and 100% means you recovered a portion of your investment but not the full amount. Either way, this formula tells you how much of your initial investment you can expect to get back when you sell.

Remodeling Projects with Good ROIs

The Journal of Light Construction puts together a fantastic cost vs. value report that provides a breakdown of the home improvement projects yielding the highest return on investment. What follows are some national statistics on home renovations that could add the most value to your home.

Garage door replacement

Installing a new garage door can enhance your home’s curb appeal, improve your home’s safety, and increase its energy efficiency. The number of garage door designs and materials is nearly endless!

When you pick out a new door, consider how much insulation you want, whether you want windows or hardware, and what style and materials you prefer. A garage door should match the home’s architectural style, in addition to the windows, doors, and other exterior details of the home.

• Project cost: $4,672
• Resale value: $12,507
• ROI calculation: 267.7%

Manufactured stone veneer

Manufactured stone veneer has an outstanding rate of return. Manufactured stone veneer emulates natural stone, but it’s easier and more cost-effective to install.

For this project, you’ll remove the bottom third of your siding and add manufactured stone veneer around the perimeter of your home (and the archway above your door if you have one).

This really upgrades the entire look of your home. Even better, stone veneer is hardy and virtually maintenance-free.

• Project cost: $12,150
• Resale value: $18,460
• ROI calculation: 151.9%

Minor kitchen remodel

If you have to decide between a kitchen and bathroom remodel, you may want to go the kitchen route. You might be surprised to learn that a minor kitchen remodel has a better ROI net than a major kitchen remodel, where you can recoup more than you spend. Small changes can make a huge difference in how your kitchen looks.

For this project, you’ll replace the cabinet and drawer fronts and hardware but keep the cabinet boxes. You’ll replace appliances with energy-efficient models.

You’ll also install laminate countertops, a mid-priced sink and faucet, and new resilient flooring. This can include vinyl tile and planks, cork, rubber, or polymer floors. Finish your kitchen by painting the walls, ceiling, and trim.

• Project cost: $28,458
• Resale value: $32,141
• ROI calculation: 112.9%

Deck addition

Everyone uses their outdoor living space a little differently, so keep this in mind when you’re looking at getting a good ROI. Something like a wood deck adds diversity, giving you many more options in your backyard!

Consider adding a built-in bench, a planter, and stairs (made out of the same planking as the deck), as well as a complete railing system to make your deck as versatile as possible.

• Project cost: $18,263
• Resale value: $17,323
• ROI calculation: 94.9%

Siding replacement

Want to upgrade your curb appeal? Think about replacing your exterior siding with either fiber-cement or vinyl siding. New siding can completely change the look of your home’s exterior.

You’ll also benefit from better insulation. Modern siding materials have insulation in their design, helping your home retain heat in the winter and reflect heat in the summer, which will save money. Siding also helps to protect your home from the elements and pests. Here’s how the two most popular options compare:

Fiber-cement:

• Project cost: $21,850
• Resale value: $19,228
• ROI calculation: 88.0%

Vinyl siding:

• Project cost: $18,280
• Resale value: $14,624
• ROI calculation: 80.0%

Bathroom remodel

A new vanity and sink, complete with fixtures you love, can change the look of the room.

If you have a standard builder-grade mirror, swap it out for a framed mirror and add updated lighting on either side. If you’re in the market for a bigger upgrade, consider surrounding the shower with tile, or even installing a freestanding soaking tub if space and money allow. Floors are also a great upgrade—and there are tons of options available!

• Project cost: $26,138
• Resale value: $20,915
• ROI calculation: 80.0%

Other High-Impact, Low-Cost Improvements

Paint

Paint is so simple, yet it makes the biggest impact on your home’s interior and exterior. Plus, it’s one of the least expensive changes you can make! Many people opt for neutral colors to give their home a timeless look or to have the freedom of switching up the décor. Neutral colors are also highly recommended if you’ll be selling your home soon.

Flooring

It can be hard to feel comfortable in your home if you don’t love your flooring. Hardwood floors always look fantastic and are great for resale. Maple, oak, and hickory are durable choices, as are bamboo, cork, and other eco-friendly options.

Luxury vinyl tile and wood-look tile are also durable, especially if you have pets or a swimming pool. They’re waterproof and nearly indestructible.

If you have small children, you may want to consider upgrading the carpet instead (with a cushy pad underneath), to keep little crawlers and walkers safer. But if you can, keep carpeting to bedrooms only.

Entry door replacement

Did you know that a new front door could return a great ROI? First impressions are everything, and so is curb appeal. When you’re considering low-cost home improvements to increase your home’s price, this is one you don’t want to ignore.

Making Your Home Stand Out

Of course, there are many other home renovations that can spruce up your home and act as an investment gain when the time comes to sell. Just consider the costs of investing versus the potential rate of return.

In a changing market, a home chock-full of upgrades can really stand out. Plus, you can use the equity in your home to finance or partly finance these home renovations. APM is happy to help. Reach out to us today to learn how you can put your hard-earned equity to work for you.

This blog has been updated from its original posting date of May 31, 2020.

Maine’s governor signed new legislation last week, applying comprehensive regulations to originations of home equity investment products in classifying them as “residential mortgage loans.” 

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Gov. Janet Mills signed the bill into law following early April passage in both chambers of the state’s legislature. In labeling HEIs as “shared appreciation mortgage loans,” bill LD 1901 requires regulation and oversight of the products in a manner comparable to home lending rules. 

“This legislation applies comprehensive boundaries to a complex financial product that is often marketed and sold without regard for the long-term impacts on homeowners,” said National Consumer Law Center senior attorney Andrea Bopp Stark in a press release, while praising the transparency it would bring. NCLC provided technical assistance for the bill’s development and testified in support. 

Rep. Art Bell, D-Yarmouth, served as sponsor of the legislation, which also received support from the Maine Bureau of Consumer Credit Protection. 

The bill went into law immediately after signing, with HEI agreements now subjected to new regulations, including:

• Mandatory consumer counseling prior to origination, conducted by an approved federal or state agency. 

• The presence of independent legal counsel to assist customers prior to the transaction in order to counter future claims of unfair or deceptive trade practice. 
• Assignment of liability to secondary market investors due to HEIs’ classification as “high-cost mortgage loans” in the case of any legal action from the homeowner.
• Disclosure of annualized costs, payment amount at settlement and equivalent annual percentage rate for each year of the agreement based on a real estate appreciation index, as well as periodic statements. 
• Prohibition against added fees or a different settlement formula from previously agreed-upon terms for prepayment or early termination.
• Prohibitions against any unreasonable restrictions that would prevent the homeowner from renting out their property.
• Prohibitions against provisions that would prevent the homeowner from obtaining a rate-and-term refinance on the secured property, with the HEI provider agreeing to subordinate the interest on its agreement. 

The bill subjects shared appreciation agreements to the Maine Consumer Credit Code, which took effect on Oct. 29, 2025, thereby nullifying any HEIs originated after that date. 
Known by various names, including home equity investments or shared-appreciation agreements, the products allow consumers to take out a percentage of accrued value in their properties through a signed contract. The agreements come with no requirement of regular repayment or interest due until the end of their term or early termination. Once the contract ends, a full lump sum becomes due along with a previously agreed-upon rate of appreciation. 

Providers of the contracts have found themselves subject to numerous lawsuits and enforcement actions in several states, with their clients claiming they did not fully understand the nature of the products or the extent of the lump-sum balloon payment owed at the end of their term. Lawyers have accused providers of “deceptive” marketing tactics that could lead to dire consequences, including foreclosure.    

The HEI industry reacts

An earlier proposal included within the legislation would have restricted liens taken against any property covered by HEI contracts and turn into a de facto prohibition against providers. Although that provision was eliminated from the final version, the new obstacles imposed from the signed bill “will effectively ban” HEI products in the Pine Tree State and eliminate consumer access to a critical financial tool, their providers said.  

Following passage in the legislature earlier this month, the Coalition for Home Equity Partnership, a trade group representing HEI firms, quickly called for Gov. Mills to veto the bill. 

“The passage of LD 1901 will have real consequences for Maine families, business owners and seniors during a time of growing financial uncertainty. Lawmakers set out to protect homeowners but instead passed legislation built on a flawed foundation that makes it operationally impossible for shared equity providers to serve them,” said CHEP President Cliff Andrews prior to Mills’ signing. 

“We are not asking to operate without accountability; we are asking for a framework we can comply with,” he added.  

The latest development represents a new regulatory setback for growth in the segment, which has seen several startup companies enter this decade. Among CHEP’s stated goals is cooperation with state regulators to establish a legal compliance framework that would support expansion of shared-appreciation agreements across the country.  

Leaders of HEI firms regularly emphasize their wishes to carve out a path distinct from mortgage lenders and in the past, sometimes sought to avoid classification of their offerings as “home loans” or customers as “borrowers,” which might subject them to a stringent degree of banking regulation. Some home affordability advocates, including the Urban Institute, have also come out to support the industry. 

On the opposing side are consumer advocates and lawmakers. Legal suits brought against HEI providers have argued their products meet the definition of mortgages, and the companies should adhere to the same laws as home lenders. 

Recent rulings suggest lawmakers may be more receptive to consumer arguments. A 2025 Washington State ruling explicitly described the HEI product offered by San Francisco-based firm Unison as a reverse mortgage. Currently, Boston-based Hometap is involved in a lawsuit brought by its state’s attorney general, who made similar claims.

Unison, a pioneer in the space, agreed to settle the Washington State case late last year but currently faces new lawsuits filed in 2026 in Colorado and the District of Columbia.