What are the Different Types of Racehorse Ownership?
The idea of buying a racehorse is exhilarating, but can often seem like a rather tricky prospect. There are many factors to be considered, such as what horse to buy, how much to pay for it, who to train it, and most importantly, what type of ownership to assume. Any prospective buyer should take the time to consider their options and choose the type that's right for them.
The first type of ownership to consider is Sole Ownership. This type of ownership means that you alone own the horse, any profits are yours to keep, and any costs are yours to cover. All decisions regarding the horse will be yours to make, including the name. This type of ownership is best for individuals who like to keep 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 Co-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 manage them. The companies shareholders are co-owners of the horse.
Leasing - This is a fairly flexible option and ideal for investors who are hesitant about owning a racehorse. A lease can be made for a designated period of time - as little as a single race, or for the entire racing career of the horse.
Joint Ownership - can consist of up to 12 individuals. Each of the owners has a say in the management of the horse, and all expenses and profits are usually shared evenly.
Racing Partnership - can consist of up to 20 individuals, 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 managing the details partnership, makes all the decisions, and usually is a co-owner. This type of ownership is best for those who don't know much about horses or horse racing. Just make sure to 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 member of the group is responsible for the management of the co-ownership.
- Professionally run co-ownership - This type of ownership employs an organizer to set up and run a co-ownership, for a nominal fee of course. All management decisions are handled by the organizer, and owners have relatively little involvement with the business side of racehorse ownership.
If you're not sure yet if you want to own a racehorse, then you might consider joining a racing club. These usually require that you lease an ownership interest 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 the horses, racing procedures, and general atmosphere of the horse racing industry before committing to spend a large amount of money or assuming the responsibility of racehorse ownership.
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