Buying a racehorse can be daunting. Consider sole ownership or joint ownership, which includes company ownership, leasing, joint ownership, racing partnership, social group, and professionally managed co-ownership. Joining a racing club is also an option for those unsure about ownership.
The idea of buying a racehorse is exhilarating, but it can often seem like a pretty daunting prospect. There are many factors to consider, such as which horse to buy, how much to pay for it, who to train it, and most importantly, what type of ownership to hire. Any prospective buyer should take the time to consider their options and choose the type that is right for them.
The first type of property to consider is sole ownership. This type of ownership means that you alone own the horse, all profits are yours to keep, and all costs are yours to cover. All decisions regarding the horse will be yours, including the name. This type of ownership is ideal for people who like to stay in control of their investments and are willing to put a lot of time and energy into managing the details of racehorse ownership.
The second type of racehorse ownership is joint ownership, which is essentially any type of racehorse ownership other than sole ownership. There are 4 basic types of co-ownership:
Company Ownership: A company owns one or more horses and appoints a registered agent to handle them. The company’s shareholders are co-owners of the horse.
Leasing – This is a fairly flexible option and ideal for investors hesitant about owning a racehorse. A lease can be entered into for a specified period of time, even for a single ride or for the horse’s entire racing career.
Joint ownership: can be made up of up to 12 people. Each of the owners has a say in the management of the horse and all expenses and profits are usually shared equally.
Racing Partnership: May consist of up to 20 people, but at least two partners must be registered owners. There are 3 types of partnerships to consider:
Trainer Managed: In this type of ownership, a trainer is responsible for handling the details of the partnership, makes all the decisions, and is usually a co-owner. This type of ownership is best for those who don’t know much about horses or horse racing. Just make sure you find a trainer you trust and who will keep you informed.
Social group: usually consists of a group of friends who want to pool their money to buy a horse. One group member is responsible for managing the co-ownership.
Professionally Managed Co-ownership – This type of property employs an organizer to set up and manage a co-ownership, for a nominal fee of course. All management decisions are handled by the organizer and owners have relatively limited involvement with the business side of racehorse ownership.
If you’re still not sure you want to own a racehorse, you might want to consider joining a racing club. These usually require you to rent a share of the property and pay a fee to register with the club, but you are not required to own a racehorse. This allows prospective buyers to become more familiar with horses, racing procedures, and the general feel of the horse racing industry before committing to spending large amounts of money or taking responsibility for ownership of racehorses.
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