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Investing in a racehorse may be a better bet than gambling

The fun involved can’t be valued, from following your horse through training to days out at the races, cheering on your jockey from the owners’ enclosure

June 5, 2014 | By:

We've seen the images of ecstatic owners after their horse has won the Derby. But how do you buy a racehorse, and are you better off owning a leg than having a flutter? Tricia Ronane reports

Buy a racehorse_Epsom Derby winner Camelot_2012 620 Corbis

Owning horse is a thrill as well as an investment. Photo of 2012 Derby winner Camelot from Corbis

Racing is known as the sport of kings and, let’s face it, there are several prominent royals who practically run the show with their mega ownership and breeding rostas. You’ll probably spot a few down at Epsom for the Investec Derby this weekend.

Our very own monarch is openly enamored by the sport, with a string of 25 horses in training. Sheikh Mohammed, the ruler of Dubai, owns around 1,000 here in the UK alone, while Prince Khalid Abdullah of Saudi Arabia, could be called the luckiest owner of them all with Frankel the £100m wonder horse in his stable.

But you don’t have to be royal to go racing and enjoy the thrill of watching your own horse gallop home a winner.

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If you’re reaching the stage where your mortgage is paid, school fees are no longer draining your bank account and you are beginning to look for ways to enjoy and even increase your surplus cash, you could find worse things to do than buy a racehorse.

Sure, there’s the stock market, an overseas home or fine art but these things don’t live and breathe and provide you with the huge buzz owning a winner at the races does.

Investing in a horse: a trainer’s view

National Hunt trainer Lawney Hill makes the whole concept of owning your own horse sound very appealing and provides prospective owners with a warm welcome at her Oxfordshire farm.

“It’s an investment that can be enjoyed all year round by all the family,” she says.

At Lawney’s, as with most good trainers, you will be encouraged to visit the gallops and watch your horse in training, enjoy a social breakfast with the trainer and other owners afterwards, and really feel involved with your horse and the team looking after it.

Following all the preparation involved in getting a horse to race day makes the occasion so much more than just a matter of reading form and placing a bet.

How to buy a racehorse

There are many ways to get in on the action, requiring varying degrees of financial commitment.

You can, of course, buy a horse outright and own it yourself. Or you may find it more enjoyable to spread your investment over a share in several horses by joining a syndicate ( a good way to start and to enjoy the social side of racing) or sharing ownership with friends; four is a good number – a leg each.

It’s not necessary to have any knowledge of horses and blood lines; a good trainer or bloodstock agent can take you to the sales (Tattersalls is the best known) and advise you on breeding and confirmation to help you invest wisely.

All good trainers these days have extensive websites with details of how to buy into racehorses or shares in horses for sale. Alternatively, you can go to a website like Highclere Racing or Racing Index for details of syndicates.

It’s a good idea to look up the trainers of any horses you like and start from there, or go by location, depending on where you live and how far you want to travel.

If Mike Tindall can make money out of horses, so can you…

It’s true that the bigger your investment at the start, the more chance you have of a high return, but there are examples of impressive returns for relatively low initial investment.

Rugby star-turned-royal Mike Tindall bought his horse, Monbeg Dude, for around £12,000. It went on to win the Welsh National, was seventh in this year’s Grand National and has earned more than£100,000 in prize money to date.

The Goodwood owners group bought Goodwood Mirage for around 27,000 guineas and sold him for 380,000 guineas at the autumn sales last year. (A guinea is an old currency still used in horse racing, originally 21 shillings, that converts today to one pound and five pence.)

The running costs of keeping a horse

Of course, owning a horse for any discipline is no cheap thrill and there is a variable cost in maintaining your investment.

Starting with the basic fees for livery (room and board for your horse), encompassing the inevitable vets bills (hopefully not too often or too serious) and travel, entry fees and so forth, the Racehorse Owners Association puts it at around £20,000 a year.

However, prize money can eclipse these costs, or at least cover them. You may be advised to sell your horse at its peak and see a sizeable profit that way. Or a colt with wining form could go to stud (for breeding) and earn his keep for a very long time by merely servicing a sperm bank!

But be realistic: they can’t all be Seabiscuit-style superstars and some do, sadly, get injuries that put them out of the running altogether.

The fun involved can’t be valued, though; from following your horse through training to days out in your glad rags at the races entertaining friends to cheering on your jockey from the owners’ and trainers’ enclosure.

Plus, race meetings lay on a lot more these days than just horses: there are restaurants, bars and shopping opportunities.

Entertainment after the last race now includes live music so you could even find yourself trackside singing along to your favourite band long after your four-legged friend is tucked up in his stable.

There might be safer ways to invest money than in bloodstock, but if you want to feel like royalty you can come close by joining the sport of kings.