So, you love racing in all its forms, you’ve got a bit of cash to spare, and you want to get even further into the world of racing. Why not look into how to buy a racehorse?
This can be a very rewarding thing, both financially if your horse does well, and in terms of enjoyment too. You don’t necessarily need to have the facilities to keep a horse to enjoy buying a racehorse of your own, as you can go into partnership or shared ownership with another individual or several others, and your horse can be kept and trained at a dedicated racehorse facility.
Let’s have a look at the ins and outs and dos and don’ts of how to buy a racehorse.
What You'll Learn Today
Where To Buy A Racehorse
Most racehorses are sold at auction as youngsters (around a year old). If you trust your eye for horses you could go along and pick the best one you think – but a better bet is to take someone experienced with you, who should be able to pick a winner just based on conformation and gait.
An expert will also help you spot which horses might have health problems and should be avoided.
Cost Of A Racehorse
Buying a racehorse outright as an untried youngster will cost anything between $500 and a few thousand dollars. As they get older and have raced, you’re looking at far more of an initial outlay!
What a share in a racehorse will cost you will vary depending on the horse, and how much of a share you have. Typically, people start with a 2.5 or 5% share, which can set you back anywhere between $500 to $3,000, depending on the quality of the horse.
What you outlay initially will vary depending on what type of horse you buy, its pedigree and history, and its current condition and whether it has any faults. The amount of people in your shared ownership group will affect the money too – more owners means the initial costs are spread further, but also that any potential winnings have to be split too.
Buying your own racehorse is all well and good, but the best, most cost effective way of buying your own winner is to invest in a part of one. No, not just one or two legs! A part stake or a syndicate is a great way to get into owning your own racehorse.
According to the Racehorse Owner’s Association, more than 60% of racehorses trained in the UK are jointly owned, so you’d be in good company to own a share of a horse.
You could team up with a few other people to own shares in your very own racehorse. This way you get all the fun of owning a horse – visiting the stables, watching your horse exercising, access to select areas on race days – without the hassle and worry of actually owning it outright.
Of course, there is the added bonus of potentially making money! If your horse wins a race, the prize fund will be spilt between the shareholders, and if he is sold or put to stud, these fund will be shared out too.
You will have some upfront costs, plus regular payments for training, accommodation and vet’s fees and the like, but these are small costs compared to what you could net if your horse wins big.
Why not have a look into a racing syndicate? A syndicate involves buying a share of a racehorse with between 10 and 20 other people, and means that you will all share the potential winnings your horse brings home, and the money that you all contribute each month go towards the training and keeping fees of your horse.
The two main options for a syndicate are leasing and buying.
When you lease a horse, the original owner of the horse keeps full ownership of the horse, but the syndicate keeps any prize money the horse may win, and pays to have to horse run in its name. If your horse is leased, you will only be entitled to its winnings, no profits from the sale of breeding profits it may make will come your way. It’s a good way to get into owning a racehorse with little risk or financial outlay on your part.
When you buy a horse through the syndicate, it belongs to that syndicate – up to 20 other people including yourself. This is the more expensive upfront option, but it can turn out more lucrative in the long run if the horse wins races, or is sold, or earns money through breeding. With syndicate ownership you will be able to claim an agreed share in your horse’s winning stakes, plus be rewarded if it sells for a profit or makes money through breeding – though you will pay more in the long run if neither of these things happen.
Another option for you is to join a racing club. Being a member of such a club means that you pay an annual membership, but you do not actually own any horses. Prize money from any horse who wins a race is shared between the club members, but the club will keep any money made from selling a horse.
A racing club ownership of a horse is a great first step into racehorse ownership – it is a relatively low cost, risk free investment into the horse racing world, which will help you learn the ropes and to decide if buying an entire racehorse and everything that comes with it is really for you.
How to buy a racehorse should not be considered a way to instantly get rich; it carries some regular costs as well as some upfront fees. Unless you strike it lucky with a very good horse on a winning streak then you may find that you are paying in for years before you make enough to retire on – but owning your own racehorse is a great way to get more involved with the sport. Plus, there’s the added bonus that you don’t actually have to look after the horse yourself!