The Nitty-Gritty on Buying a Racehorse
This is a continuation of “You Bought a What?” which is available here.
Probably like most of you, I know very little about owning a racehorse. What I thought I knew was that owning a thoroughbred racehorse was expensive and only the elite had the means to own one. I was surprised and happy to learn that neither of those preconceptions were true.
After doing a little research, I discovered the easiest and most economical way to get involved with owning a racehorse was through a racehorse partnership (also known as “syndicate”). A quick Google search will bring up multiple result pages of partnership opportunities. There may be slight differences between partnerships but the basics are generally the same for all. Here’s how a racehorse partnership works:
- The partnership management team is responsible for purchasing top-quality horses, either through auctions or private sale. The horses are usually purchased as yearlings or 2-year-old’s.
- The purchased horses are then offered to the public. In my case, the horse was offered on my partnership’s website. The website will usually include a picture of the horse, it’s pedigree, auction info, and any previous race and workout info. All of this info should be considered when choosing your horse.
- The initial investment or “buy-in” differs from one partnership to the next. Some offer percentages of ownership (usually a minimum of 3%) while others offer “shares” (for example, a horse may be divided up into 20–30 shares). An initial buy-in can cost anywhere from $1000 and up although the cheapest I’ve seen is $1200. In addition to the initial buy-in, most partnerships charge monthly fees to cover ongoing expenses like training, food, vet bills, administrative fees, etc. These charges may be as much as a few hundred dollars (in my case, approximately $120/month). There are some partnerships that offer “no expense” partnerships but the buy-in is generally more. One more important note about ownership. The partnerships that I have looked into treat each individual horse as an LLC (limited liability corporation). Therefore any purse winnings or monies from sale or auction (aka profit) are paid quarterly to each owner according to that owner’s stake. Of course this also means that any expenses are billed quarterly. The LLC is terminated when the horse is retired from racing or sold.
Of course the main reason for buying into a racehorse is the perks! In addition to the thrill of seeing your horse grow, progress, and maybe even win someday; horse ownership comes with several more practical perks. One of the best perks is unlimited access (for owner and family) to the stable and paddock area. This gives every owner the opportunity to meet and talk with trainers, jockeys, and other owners. Ownership also allows for free entry to certain tracks (in my case; Aqueduct, Belmont, Saratoga, and Finger Lakes) as well as free parking and access to special dining and seating areas for the owner and family. For me personally, the best perk of racehorse ownership is the camaraderie shared with other owners, horsemen and of course my horse!
Up Next: The Big Decision… Viserion