Posted by Gary Fenton on February 15, 2017
Buying a thoroughbred racehorse can be…should be….the most exciting investment you ever make. There is no better feeling than watching YOURhorse take the lead at the top of the stretch.
BUT HOW MUCH DOES IT COST?
It’s the question we get asked the most – – and here’s the answer.
Championship quality thoroughbredscost between$100,000 and $300,000 to purchaseand about $45,000 a year in expenses. Of course, buying athoroughbred is competitive andpurchase prices can easily exceed $300,000.We’d like to think if you have the right team representing you, they will be able to find a top thoroughbred racehorse in the range above. Furthermore, if you join a syndicate like Little Red Feather Racing, you can purchase as little as 5% and share in the above costs with fun and like-minded partners all professionally managed. $15,000 upfront and $2,250 per year for 5% allows you to spread your risk and own many horses for less than the cost of owning one on your own!
As for expenses,the$45,000 a year to maintain a racehorse in training (in Southern California) is broken downas follows:
Step 1: The Basics
The main expense in race horse ownership is your horse trainer. In Southern California for example, the highest price trainer charges a “DAY RATE” of $120. However, even some of the very best trainers – Mike Puype, Phil D’Amato, etc. – charge in the neighborhood of $85 – $95. The day rate consists of:
- Employees – Assistants, Grooms, Hot walkers, Exercise Riders
- Payroll Taxes (Thank you California)
- Workers Comp (Again, thank you California)
- Feed/Bedding – Hay, Straw, Grain
- Vitamins
- Supplies – Bandages, Tack, etc.
Trainers claim they do not make any money from their day rate and any income is earned from their cut (10%) of the horse’s earnings. I’m not sure this is 100% true but, I am sure the trainers are not getting rich from their day rate either. Chances are your horse will not be in training at the racetrack 365 days a year. These horses are not machines and, like professional athletes, will need a break from time to time. When a horse is sent to a farm for a little R&R, the farm’s day rate is generally around $50 a day.
Step 2: But Wait, There’s More!
On top of the day rate, there are other standard monthly expenses such as:
- Blacksmith – $80-$100 month
- Veterinarian – $200 – $1,500 month
- Dentist – $75 month
- Chiropractor – $75 month
If you are a member of a horse racing partnership you may be charged for accounting costs as well. Some racing syndicates may also charge monthly management fees.
Step 3: Additional Fees
- Entry Fees: Most people are surprised to find out that it does not cost anything to enter your horse in a race, unless the race is a stakes race (Kentucky Derby, Breeders’ Cup, etc.). Some stakes races, like many of the Breeders’ Cup Classic, cost in upwards of $120,000. Since the purse of the Breeders’ Cup Classicis $6,000,0000, many owners will take their chances with the hope of a jackpot payoff. For stakes races in the $200,000 purse range, the entry fee is generally around $3,000. Rule of thumb isentry fees are 1%-2% of the purse.
- Trainer & Jockey Commissions: These are not necessarily fees so much as bonuses taken out of a winning purse. In general, the trainer and jockey receive 10% each of any winning purse and 5% and 5% for 2nd and 3rd place finishes. It’s smart to keep this information handy when creating your horse racing business plan so there are no supriseswhen the winning purse shows up with these deductions.
- Accounting: Many horse racing partnerships, like Little Red Feather Racing, will charge accounting fees and end-of-year K1 preparation fees. As an individual horse owner, you must account (pun intended) for the time it takes to pay all of your monthly bills and keep records for tax purposes. Our suggestion is to simply hire an account who is familiar with the racing game to assist you.
So there you have it. Thecost ofowning a thoroughbred racehorse!
Interested in finding out more about horse racing partnerships? Please contact Little Red Feather today or download our eBook below.
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FAQs
It's the question we get asked the most – – and here's the answer. Championship quality thoroughbreds cost between $100,000 and $300,000 to purchase and about $45,000 a year in expenses. Of course, buying a thoroughbred is competitive and purchase prices can easily exceed $300,000.
How much does it cost to train a Thoroughbred horse? ›
There are approximately 800 licensed Thoroughbred trainers in California. Their rates will range from $45 to $80 per day. Rates are generally higher in the South. It is up to you, as an owner, to determine the trainer's care program that best fits your needs.
How much does it cost to maintain a Thoroughbred horse? ›
What's the Annual Expense of Owning a Thoroughbred Horse?
| Expense Category | Annual Cost |
|---|
| Full-Boarding Services | $12,340 |
| Part-Time Boarding | $10,630 |
| Home Care | $5,707 |
| Healthcare (Monthly) | $500 (Monthly) |
5 more rowsJan 4, 2024
The short answer is that it costs a lot – the average auction price of horses in the 2023 Derby field was around $446,000, and between training, healthcare, equipment and food, you're probably spending about $50,000 before even getting into the Derby particulars.
How profitable is owning a race horse? ›
As mentioned, investing in racehorses is extremely risky and isn't likely to be profitable for most investors. However, for a very small number of investors who own or have a stake in a successful horse, the winnings can be substantial. Investing in racehorses can best be thought of as a lifestyle investment.
How much do thoroughbred horse trainers make? ›
$40,000 is the 25th percentile. Salaries below this are outliers. $62,000 is the 75th percentile.
What is the life expectancy of a thoroughbred horse? ›
Thoroughbred Horse Lifespan and Health Issues
The average life expectancy of a Thoroughbred horse is 25 to 35 years. Due to inbreeding, some Thoroughbreds may be more prone to health issues such as: Abnormally small hearts.
What is the most expensive part of owning a horse? ›
Horse board or housing costs are typically the biggest expense associated with horse ownership. Hay and feed bills are also among the highest costs and can fluctuate based on weather and other factors.
What is the average monthly cost of owning a horse? ›
Monthly Equine Housing Costs
Full-care board is the most comprehensive option and typically includes a stall, feed and basic supplies, and all daily care. Here are some estimated ranges for each: Pasture board: $100-500/month. Partial- or self-care board: $200-600/month.
How many acres does a Thoroughbred need? ›
An adult horse typically requires around 1 to 2 acres of grazing pasture, allowing them to fulfill their dietary needs and engage in natural grazing behaviors.
Kentucky Derby payout for winners
The owners of Mage, the winner of the 2023 Kentucky Derby, were awarded $1.86 million out of last year's $3 million purse — 62% of the entire purse. That winner payout will raise to $3.1 million in 2024 — $100,000 more than the entire purse from 2023.
How much do horse trainers make in the Kentucky Derby? ›
While exact splits might vary, typically the owner of a Kentucky Derby winner receives 80% of the purse, leaving 10% apiece for the winning jockey and trainer. Under this arrangement, in 2024 the winning owner will receive $2.48 million before taxes and the winning trainer $310,000 before taxes.
How much was Secretariat worth? ›
At the beginning of his three-year-old year, Secretariat was syndicated for a record-breaking $6.08 million (equivalent to $41.7 million in 2023), on the condition that he be retired from racing by the end of the year.
What is the average income of a horse owner? ›
Horse Owner Demographics
Of the nearly 2 million horse owners in the US, only 28% earn annual incomes exceeding $100,000 while 35% have an annual household income below $50,000. Almost half of horse owners are from the middle class, earning incomes between $25,000 - $75,000.
What is the average cost of owning a racehorse? ›
It's the question we get asked the most – – and here's the answer. Championship quality thoroughbreds cost between $100,000 and $300,000 to purchase and about $45,000 a year in expenses. Of course, buying a thoroughbred is competitive and purchase prices can easily exceed $300,000.
What is the most profitable horse to breed? ›
The American thoroughbred is one of the most expensive horses in the world. Famous as the speed demon of the equine world, the breed has the best record on the horse track. Additionally, thoroughbred horses excel at dressage, riding, driving, and showjumping.
What is the average price of a well trained horse? ›
The initial price of a horse can range from $500 to $5,000 to $50,000 USD or more, depending on pedigree, performance record, training or development and manners. However, this is just the beginning.
How much does it cost to breed a thoroughbred? ›
Regardless of whether you send your mare to a veterinary clinic to be bred, or your veterinarian comes to your farm to do the job, it's typically going to cost anywhere from $300 to more than $600 per estrus cycle, depending on sem*n type: cooled or frozen (the latter process can be slightly more expensive).
Can Thoroughbreds be good for beginners? ›
They are athletic, elegant and intelligent, and they have a super work ethic. They are versatile, brave, kind and willing. A quiet, well-trained Thoroughbred can also be an excellent beginner horse.
How old are Thoroughbreds when they start training? ›
Training and Racing
Thoroughbred racehorses will typically begin racing at two or three years old, and the average career will last until the horse is 4 or 5 years old (but can last longer based on the soundness and success of a horse). You can learn more about their training and race lives by visiting Keeneland!
