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The Maintenance Cost of a Fractional Home

How do you calculate house maintenance costs?

The purchase price of the house is just the starting point. Home ownership includes more expenses than paying taxes and utilities, and thus it is important to crunch the numbers and get a full picture of the potential costs of owning a second home. Most importantly, those expenses have to be paid whether the property is used or not. Not only recurring costs need to be factored in, but also unexpected repairs. So, how do you calculate house maintenance costs? Many home experts believe in the 1% rule, where 1% of the total purchase price is set aside for regular maintenance and repairs. Obviously, each home is different and many factors will affect the cost of maintenance (new vs. older homes, small vs. large homes, mild vs. severe weather conditions, etc). A more conservative approach would be to budget between 1% and 4% of the home's value each year.

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Another 'cost' that is often overlooked is the time put into maintenance. It does take time and effort to manage a second home remotely. Many people do not consider how much work they will have to put in so that they can enjoy or use the property when they are ready, and keep it in good condition when they are not. 

Split costs and full maintenance

One of the key benefits of sharing ownership is that costs are split proportionally between the co-owners. Additionally, the management of the property is handled by a management company, that will deal with the regular maintenance and repairs of the property, bringing peace of mind and removing the stress involved with the upkeep of the property. Those are the costs that are usually covered:

  • utilities: gas, electricity, water, internet

  • local property taxes

  • insurances: content, building

  • admin: legal and accounting

  • maintenance (garden, swimming pool)

  • housekeeping (handover cleaning, linen and towel change)

  • repairs​

  • management fee (see section below)

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All those expenses are charged on an actual cost basis and divided equally between owners (in proportion to the percentage of shares owned). It may also include funds set aside for repairs or improvements - capital reserve or emergency fund - which might be needed someday for the property.

What is the management fee?

The management (or admin) fee covers the costs for all administrative work and technology necessary to run the property, as well as the legal entity oversight and ongoing owner support. 

Here are some examples of the monthly fee charged by some companies offering fractional ownership:​

$99 per share

€120 per 1/8 share

€125 per 1/8 share

Varies by home, usually between $150 and $300 

£86 for 1 share

Varies by home, from €29 to €99

$125 per co-owner

£99

€99

€49 per share

£200 / €200

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  • Pacaso: 

  • Vivla:

  • Lazazu:

  • Ember:

  • Arrilo:

  • Dalima:

  • Ko:

  • Flyway:

  • Tuseca:

  • SecondProp:

  • Fractal:​​

All figures accurate as of October 2023

How much does it cost to maintain a second home?

According to SecondProp the average annual running costs for a typical EUR 1,000,000 villa with a garden and pool in Spain stand at around EUR 28,000. Below is a detailed breakdown:

Utilities (water, gas, electricity, internet)

Local taxes

Housekeeping (handover cleaning)

Home insurance

Maintenance and repairs 

Property admin (accounting and legal)

Community expenses 

Household items

Contribution to reserve fund 

Management company fee

Total

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In the case of a 1/8th ownership, the total cost would be divided equally between the 8 co-owners, with each one of them paying around EUR 3,538 per year (equivalent to EUR 295 per month) for maintenance and repairs.

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EUR 2,400

EUR 1,800

EUR 5,600

EUR 1,000

EUR 3,000

EUR 3,000

EUR 2,000

EUR 2,400

EUR 2,400

EUR 4,700

EUR 28,300

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