How to Invest in Horses

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Investing in horses is an option almost as old as human history. Investing in high quality horses, from breeding and selling the resulting offspring to breeding fees could bring the owner of a valuable mare or stallion considerable amount of money. Today, horse investments are typically in the racing world.

Simple Steps to Racehorse Investment

  • One way to begin the process of investing in a racehorse is to read The Daily Racing Form. This is the key vehicle for race results, race news and classified ads of racehorse investment opportunities. If you see an investment opportunity you are interested in, follow up through the contact information provided in the classified. You will receive pedigree information and any results from races run for the horse being advertised. You should research thoroughly, as you would for any investment, to minimize your risk.

  • The simplest investment in a racehorse is through a partnership arrangement. Owners of a racehorse looking for investors offer shares in the horse. Typically you pay a few hundred dollars per share as an upfront investment and a predetermined monthly fee (often as a percentage of costs, depending on the number of people the investment is divided among) that helps with feed, veterinary bills, stabling costs, transportation to races, training fees, and jockey fees. Look carefully at your investment portfolio dedicated to racehorse investment and decide on your investment amount accordingly.

    You also need to decide on whether your partnership investment will be "general" or "limited." General investments give you more ownership and more say in the investment's career path --- and cost more. Limited investment is a simple cost-per-share arrangement with limited involvement.

  • Another way to invest in racehorses is with outright ownership. This can be through buying a young prospect and hiring a trainer to take the horse to the highest level of its ability. You can also buy a mid-career racehorse; be prepared to pay according to its pedigree and its race results thus far. Lastly, you can purchase a horse in a "claiming race" where a set price is put on the horse prior to the start of the race and no matter what the results, the winner of the claim literally takes the horse home when the race is finished.

  • There are some trackside perks to being part owner of a racehorse. Often as part owner you are allowed in free to the races in which your horse is entered. You typically are allowed access to the barns to visit your investment. And if your horse is in the money, your next monthly bill might be covered by the horse's earnings!

Tips & Warnings

  • Never forget that your investment money is going into a live animal. Insurance is available to cover your investment in the event of career-ending injury or death.
  • Do not consider personal ownership of a racehorse unless you are prepared for the risks and uncertainty involved with this type of investment.

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References

  • Photo Credit race horse image by pearlguy from Fotolia.com racehorse and outrider image by Wimbledon from Fotolia.com racehorse number 1 image by Clarence Alford from Fotolia.com horse race image by pearlguy from Fotolia.com
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