What Are The Real Costs Of Owning A Racehorse?

| August 19, 2019
Owning a racehorse is one of the most exciting and thrilling forms of investment

Have you ever dreamed of owning a racehorse? Betting on horse racing is something that a lot of people find enjoyable with the ability to maximise your profits an exciting reason to get involved. 

However, there are many true punters who feel that betting on a horse is simply not enough. For some, the only way to truly experience the magic of the racetrack is to fully or partially own a horse. 

Of course, this is a very risky venture, but there are some amazing perks.  

For example, you can choose a name for your horse and be permitted to enter the mounting enclosure. Not to mention the potential of winning big on race day. With these perks, owning a racehorse might seem like an easy ticket to a more glamorous and financially secure future, but the costs of maintaining your horse can easily run up to $50,000 per year.  

So if you’re thinking about owning a racehorse, here’s what you need to know.

Full Owners Or Syndicate?

Owning an animal that is as athletic and as large as a horse can be very expensive when you take training and stabling into account. This is why many people look at buying a horse as part of a syndicate instead of fully owning it. A syndicate is a group of people who pool their money to ease the total costs of paying for the maintenance of their racehorse. 

Horse racing syndicates can have a maximum of 20 people. Each of the people in the syndicate will own 5% of the horse. It is important to note that some syndicates have increased their limits to 50 people. The reason for a 20-person maximum is that most race day ticketing will only provide a syndicate with a maximum of 20 tickets.  

When joining a syndicate, the ownership of the horse will be broken down into shares.  The shares in these horses will generally be offered in 2.5% increments. Most syndicates consist primarily of 5% owners. A syndicate horse will generally have between 15 and 20 owners who have 2.5%, 5% or 10% shares.  The larger your shares in the horse, the more you will pay in costs, but the more you will get in return when it wins prize money. 

If a syndicate does not seem like the right option, you can be a full racehorse owner.  However, you need to be aware of the old saying, ‘if you have to ask, you can’t afford it’.  

The Purchase Price

Before you start thinking about the maintenance costs of a horse, you need to buy the horse. This is an event that is steeped in genealogical mystique. In general, the more you quality parentage in the bloodline of the horse, the more expensive the horse will be. This is what led to the term thoroughbred.

When it comes to buying a horse, the stock the yearling comes from does matter. There are buyers who spend millions on yearlings from the big studs, hoping to increase the chance of owning a quality stayer. However, many will generally write this off as a business expense for their stable and it will not be the same for the average person buying a horse. 

For the average person, the minimum price for a horse can be around $400. However, many syndicates will look at yearlings between $50,000 and $250,000 because of elite thoroughbred breeding. 

The Maintenance of Your Horse

The real bread and butter of horse racing is not the flashy days spent at the Spring carnival. It is the early morning training sessions, the strategic months of resting or spelling and choosing the right races to prepare your horse for the big prizes.

As a side note, many people believe trainers work their horses early in the morning, generally around 3 am, because it is cooler for the horse. The bigger reason is that they require sufficient time to transport horses to the tracks for afternoon races. 

The maintenance and upkeep of your horse will be the largest expense that you will face.  A base cost will be roughly $40,000 per year. This means that a 5% owner will need to have a budget off around $50 per week over the course of the year. This makes owning a racehorse much more affordable. 

According to Max Funding’s short-term loan experts, it’s worth noting that the costs differ from traditional asset classes. They note “When you invest in most asset classes, we’re talking property and shares, the highest amount you can lose is your principal investment amount. In contrast, unless you are disciplined and prepared to cut your losses early, you can lose more than your principal as the ongoing costs of horse ownership add up.”

There are some people who place the base cost at closer to $50,000 per year. It is important to note that a lot of the daily costs will also depend on who is training your yearling. If you want a big-name trainer, you will need to be willing to pay the higher expenses.  

Where your horse is kept and who is training it will play a large role in the costs. If you have a provincial or country trainer, you will be looking at costs of $65 to $75 per day. If you have one of the big-name trainers, you will be looking at around $130 per day. 

Investment Risk And Budget Blowouts

You may have gathered 20 friends and budgeted for $50,000 per year. Now, the only way will be up. This is not usually the case because chances are, you will not stumble across a champion horse for minimal cost.  

There are times when your horse will have setbacks. Racehorses are no different from any other athlete and they need work and upkeep. A setback could be anything from a minor strain which needs a little bit of physiotherapy for it to recover back to health. It could also be a setback that requires your horse to have time off to recover from an injury.  

When it comes to the health and management of your horse, a good trainer is vital. When you own a racehorse, you should focus on the experience because chasing money is something that is best left to the professionals who invest in multiple horses.  

When it comes to risk, the largest one is that your horse will not win a race. There is no guarantee that the horse you have will ever make it onto a track. There are also a lot of things that can happen during a race that you need to consider. 

If you are looking to invest in a racehorse, you need to be able to write the money you spend on the horse off. You should be enjoying the experience of owning the horse and the thrill that comes with this. When you do that, any money you make from winning will be a bonus.  

As explained by animal chiropractor, Keith Maitland“horses are not like cars that can have parts replaced after malfunction. Injuries that occur may slow down or even stop your horse from racing, and there’s no chance to order in a spare tyre if you’d invested in a race car.”

Of course, it is important to note that this information is general only. 

You will need to take your own objectives into account as well as your financial situation.  

Owning a racehorse can be a volatile and risky venture, but it can also be exciting, money-making and an enjoyable pastime too.

Category: Special interest

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