Watching a horse that you own race down the track to victory is a thrill that cannot be denied. To make the move into thoroughbred ownership, start by determining exactly how much you can afford to spend. Decide whether or not you’d like solo ownership or if you are willing to work alongside partners. For expert assistance, reach out to an agent or trainer who can help you sort through the available horses. Be open to the possibility of buying via private purchase, claiming races, or auctions. See you in the winner’s circle!
Steps
Method 1
Method 1 of 3:
Managing the Costs of Ownership
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Create a purchase and upkeep budget. It is possible to buy a racehorse for $1,000 or even $100,000 plus. Look over your finances and consider how much you are willing to reasonably spend. Then, add into that budget an amount for yearly care and training. You can expect to spend upwards of $25,000 each year for boarding, training, medical care, and other costs. [1] X Research source
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Be a solo owner if you want more control. This is where you buy a single horse outright with your own funds. You’ll reap all of the rewards for winning, but you’ll also take on all of the risks of the investment. This is a nice option for owners looking to purchase an entry-level horse in order to get to know the art of ownership. It is often the ownership approach of owners who also double as horse trainers. [2] X Research sourceAdvertisement
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Purchase through a syndicate if you want less risk. This is a type of ownership where multiple people divide the costs, and the rights, to one or more horses. Most syndicates operate under a very specific set of guidelines, so it is important that you really understand these terms before agreeing to anything. You’ll also need to be comfortable with splitting the process of decision-making. [3] X Research source
- In many of these arrangements, the syndicate management handles the process of choosing a stable, trainer, jockey, and all that a horse needs to thrive. [4] X Research source
- Investment terms are not usually lifelong, but instead typically last anywhere from three to five years. During that period, you will likely be billed on a regular basis for your percentage of the horse’s upkeep. [5] X Research source
- Corporate ownership is another version of a syndicate. This is where you use a horse to promote a particular company or brand. [6] X Research source
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Talk with your tax advisor. Many horse owners choose to treat their purchase as the groundwork of a limited-liability company. This gives them a chance to then structure their taxes around profits and losses. Meet with your tax advisor and discuss how this purchase could affect your overall tax profile and come up with a strategy prior to buying. [7] X Research sourceAdvertisement
Method 2
Method 2 of 3:
Shopping for Your Horse
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Work with a bloodstock agent. This is a person who will guide you through the purchase process by talking with you about what you want in a horse. They will then seek out suitable horses that fit your needs and help you to make the final purchase. They usually charge a fee of somewhere around 5% of the horse’s purchase price for their services. Working with an agent is an especially good option for someone relatively new to horse ownership. [8] X Research source
- Find a bloodstock agent by attending local horse auctions and talking with other owners. Or, look for contact information via industry magazines or websites.
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Identify a target purchase age. The majority of sellers go with yearlings, otherwise known as one-year-old horses. They are generally cheaper to buy and still have a great deal of room to grow. However, this can also mean that your investment is even more of a gamble. Others try “pinhooking” where they buy yearlings and intend to sell them for more money in a year’s time. [9] X Research source
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Make a private purchase. These types of transactions are often the result of networking between a potential buyer and willing sellers. So, keep your eyes open if you are in the market for a horse and spread the word via local horse barns and breeding farms. With a one-on-one purchase, there may be some room for negotiation on the price and it is possible to learn a great deal about the horse’s background. But you must make sure that you trust the seller and the information provided. [10] X Research source
- Don’t walk away from the purchase without getting a final and formal “Bill of Sale.” This document should specify all of the conditions of the sale, including any guarantees of health. Local laws often require that sellers give a document of this type to buyers.
- As you complete the purchase, feel free to ask the seller as many questions as you like. For example, “Why are you selling this particular horse at this particular time?”
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Attend a claiming race. This is one of the most common ways to purchase a racehorse. You attend a race in which the horses entered have prices established beforehand. If you agree to pay that horse’s set price, then you get to walk away owning it. Working with a trainer or agent is particularly important for these types of buys as they can get you inside information about each animal. [11] X Research source
- There is an element of chance involved in claiming races as well. If more than one person decides to make a purchase offer, then the winning claim is chosen at random at the end of the race.
- You also have to hope that your newly purchased horse makes it through the post-race period in sound health, which is usually the case.
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Go to an auction. Horse auctions take place around the world and it is possible to bid for an animal in person, via an agent, or even through online channels. Sales are often organized around categories of horses, including yearlings and tried racehorses. Most auctions circulate a catalogue well in advance of the auction date listing the horses available and their details. Doing your research in advance can let you know which ones are of interest to you. [12] X Research source
- Prior to the auction, either you or your agent will be able to take a closer look at the horse. In many cases, a vet inspection is allowed as well.
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Invest in a harness horse if you want more frequent racing action. Your mind may instantly go to thoroughbred racing, but there are other types of equine races that may be equally interesting from an investment standpoint. Standardbred (or harness) racing involves a horse pulling a two-wheeled cart steered by a jockey. It is often cheaper to get into harness racing and with more frequent races you’ll get to see your horse in action more. [13] X Research source
- For more information, contact the Standardbreds Owners Association near you.
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Method 3
Method 3 of 3:
Making an Informed Purchase
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Educate yourself about the industry. Go to farm and track websites and browse through all of the available links. Get subscriptions to industry publications and visit ownership-themed websites, such as the Daily Racing Forum. Professional horse association websites can also offer some great resources, like the “owner education” areas of the Thoroughbred Owners and Breeders Association site. [14] X Research source
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Pick a pedigreed horse. If you are looking for a horse that can run the long race, then a study of pedigrees, or a horse’s blood background, is one way to assess staying power. A solid bloodline also provides a safety net of sorts because you can always make money off of breeding rights if they don’t perform well on the racetrack. [15] X Research source
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Get a vet clearance. When you find a horse that interests you, it is critical that you have them examined by a vet of your choosing. The vet will look over the animal’s medical history, while performing a physical examination of the limbs, eyes, lungs, and heart. They may even request x-rays of any areas of concern.
- Some horses will come with a guarantee of sorts that they do not suffer from any observable breathing or lung problems.
- The vet will likely spend some time just observing the horse’s overall behavior to see how it interacts with other animals or handlers.
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Be realistic about your potential earnings. Purchase a horse for the enjoyment of the sport and you will be happy with your investment in the long term. If you buy a racehorse for the express purpose of winning large purses, then you’ll want to harden your heart against disappointment. Each year less than 2% of active racehorses bring more than $125,000. [16] X Research source
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Participate fully in the racing lifestyle. It is important that you look at your purchase as a non-traditional investment. You’ll get the most enjoyment out of your purchase by embracing the culture surrounding horseracing. Attend the races and events. Get to know the trainers and jockeys. Be invested in the process and it will make winning or losing more worthwhile. [17] X Research sourceAdvertisement
Community Q&A
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QuestionAre geldings as valuable?Community AnswerNo. You would pay more for a stallion because he can produce, but geldings are more gentle.
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QuestionDo fillies make good racehorses?Community AnswerA lot of mares and fillies are good racehorses.
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QuestionWhich is the best pedigree for buying a horse?Community AnswerPure-bred, Thoroughbred, Arabian Thoroughbred, or a reputable racehorse breeder.
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Tips
- You may want to consider purchasing insurance on your investment. It will provide you with some security if your horse is no longer able to race for health reasons. [18] X Research sourceThanks
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Warnings
- Make sure to follow all industry registration procedures with your new horse. All of your paperwork will need to be completed and updated before your horse can enter a race.Thanks
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References
- ↑ https://www.thestreet.com/story/13562402/1/how-to-invest-in-a-racehorse-even-if-you-re-not-a-millionaire.html
- ↑ http://www.nytimes.com/2012/05/05/your-money/investing-in-a-racehorse-without-losing-your-shirt.html
- ↑ https://www.jonjooneillracing.com/owning-a-racehorse.html
- ↑ http://www.latimes.com/sports/la-sp-buying-a-racehorse-erskine-20160505-column.html
- ↑ https://www.forbes.com/sites/kerryhannon/2011/11/16/how-to-buy-a-racehorse/2/#98eb0e77362d
- ↑ https://www.jonjooneillracing.com/owning-a-racehorse.html
- ↑ http://www.kiplinger.com/article/investing/T050-C000-S002-the-ups-and-downs-of-owning-a-racehorse.html
- ↑ http://www.nbcchicago.com/news/sports/NATL-From-Purchase-to-Post-The-Price-of-Raising-a-Racehorse-202723931.html#ixzz4icqiElTH
- ↑ http://www.nytimes.com/2012/05/05/your-money/investing-in-a-racehorse-without-losing-your-shirt.html
- ↑ http://www.toconline.com/racingownership/owner-handbook/acquiring-a-thoroughbred/
- ↑ http://www.toconline.com/racingownership/owner-handbook/acquiring-a-thoroughbred/
- ↑ https://www.magicmillions.com.au/buying-first-horse/
- ↑ http://www.marketwatch.com/story/how-to-invest-in-a-racehorse-2013-05-03
- ↑ http://www.marketwatch.com/story/how-to-invest-in-a-racehorse-2013-05-03
- ↑ http://www.cnn.com/2013/03/08/sport/buying-investing-race-horse-thoroughbred/
- ↑ https://www.thestreet.com/story/13562402/1/how-to-invest-in-a-racehorse-even-if-you-re-not-a-millionaire.html
- ↑ https://www.thestreet.com/story/13562402/1/how-to-invest-in-a-racehorse-even-if-you-re-not-a-millionaire.html
- ↑ http://www.nbcchicago.com/news/sports/NATL-From-Purchase-to-Post-The-Price-of-Raising-a-Racehorse-202723931.html#ixzz4icr3ricE
About this article
Article Summary
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If you’re thinking about buying a racehorse, first determine exactly how much you will be able to spend. A race horse can cost anywhere from $1000 to $100,000, and you should expect to spend upwards of $25,000 each year for boarding, training, medical care, and other costs. If you want less financial risk, buy the horse through a syndicate, a type of ownership where multiple people divide the costs and rights to one horse. To find your horse, consider working with a bloodstock agent, a person who will guide you through the purchase process for a fee. Alternatively, attend a claiming race or at auction where you can see the horse and offer up a bid for the one you prefer. For more tips on buying a racehorse, like how to pick a pedigree horse, keep reading!
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