Is Horse Ownership A Good Investment?

For anyone interested in horse racing, the thought of one day owning a racehorse has crossed their mind.

It is the peak dream for many with a passion of the sport, with the hope of cheering home one of your runners in a big race on the calendar being an ambition that few are ever able to achieve.

However, that doesn’t stop those with deep pockets from attempting to fulfil this dream, and there have been countless occurrences when small-time owners have seen healthy returns on their profits.

For example, Hewick cost just $850 as a two-year-old and has since won the King Georgie VI Chase and the American Grand National. But, small-time owners will likely see their runners overlooked in the horse racing picks of the day. But, can ownership be a good investment opportunity? 

How Much Does it Cost to Buy A Horse?

One of the reasons that only few get into racehorse ownership is due to the high costs that it demands.

Buying a horse in the first place can be an expensive venture, and it comes with a degree of uncertainty, as most horses brought at auction are yearlings, meaning that investors are banking on potential rather than actual stats.

High-quality racehorses from proven sires will be hugely expensive, with one of the priciest in 2024 coming in the form of a Bay filly Pierro-Winx, who cost a staggering A$10 million. However, horses can be sold for a range of prices at the sale, meaning it is important to take into consideration what you’re looking to get out of the experience.

Training & Other Costs

Buying a racehorse is only the first outgoing expense for any trainer, as the money to keep horses in training is extensive.

At the top of the agenda will be training costs, which can range drastically depending on the stable, which is handed the responsibility of looking after your runner.

Training fees are charged on a daily or weekly fee, with smaller hosts costing $30 per day and the respected top yards asking for upwards of $100 daily. Therefore, training fees can reach up to $3,000 per month if you are targeting the biggest races on the global calendar.

Overall, it is reported that owning a racehorse can see investors paying out over $100,000 per year in expenses. This also takes into account a number of other outgoings, including veterinary care, farrier costs, and also supplements that your horse may need to reach their peak.

Racing Costs

Entering horses to run in races is also an outgoing payment that owners should be prepared for.

If you’re looking to enter your runner, the amount that you will need to pay will revolve around the prestige of the race that you’re entering. For example, the Kentucky Derby is one of the most famous races in the United States, and running a horse in the contest could cost up to $800,000.

First, you will need to pay a $600 nomination fee, while those that miss this deadline could be forced to pay up to £200,000. In order to gain entry into the race, your horse must successfully qualify.

However, an owner will still need to part with more money in order to secure their spot, as a $25,000 fee is required to enter the field, and a further $25,000 is then needed to start the race.

As well as this, owners will also need to enter their horse in races on the Road to the Kentucky Derby, with prestigious Grade Ones seeing the most qualifying points up for grabs, and this is also an expensive venture.

What Are The Risks?

Racehorse ownership comes with a wide number of potential risks that should be considered before making an investment. First, and foremost, horses are animals, meaning that injuries are exceptionally common, both on the track and during training. Serious issues could cut short a runner’s career on track, leaving investors without significant returns on their purchase.

Meanwhile, like any athlete, horses will be required to perform at their highest level when they are on track to improve their chances of winning prize money. However, equines aren’t robots, meaning that they are also prone to off-days.

Therefore, there is no guarantee that a runner will win prize money, regardless of their odds at the start of a race. It is also worth considering that the investment on a racehorse can be volatile.

A runner is only as good as their last run, meaning that all of their promise can easily be overlooked when a thoroughbred is sent to stud at the end of their career. Therefore, it is common within the sport for horses to be retired when they are at their peak, meaning it is rare that the most talented flat horses continue to compete when they hit five years old.