If you are a fan of horse racing, or you just love being around horses, there is a good chance that the idea of racehorse ownership has appeared in your mind at least once. After all, this is the ultimate goal for most horse racing fans, but you have to do it carefully.
Although it is all fun and exciting to cheer for your own horse on a big event, a racehorse comes with plenty of responsibilities and a hefty price tag. So, it is better to think twice about whether getting a racehorse is a good idea in the first place.
Why? Well, first of all, buying a racing horse is a big investment, and although the prize purses might seem lucrative, it is quite hard to make a profit out of it.
So, let’s dive deeper into racehorse ownership and see all the hidden costs, that might surprise you in the future.
The Initial Purchase
As we said earlier, getting into racehorse ownership isn’t cheap. The initial purchase can set you back anywhere from $20,000-$50,000 for a decent bloodline, but if you want a horse with a great bloodline, it is way more going from $200,000 to $500,000.
But since we live in modern times, buying a horse is quite easy now. You don’t have to buy an entire horse, you can only purchase a certain percentage of a horse, kind of like shares. Depending on how big your ownership is, you can get involved in the decision-making process.
So, you don’t have to spend $50,000 on a horse, you can buy in with $5,000 for 10% shares of a horse.
The big question here is whether you are looking for passion or making money. If it is just for your passion, it might be a good exchange, but if you are looking to make some money, you are probably better off investing that money in an S&P 500 index fund.
Running Costs: Feed, Care, and More
Now, buying a horse isn’t a one-time deal and your problems (costs) are just starting. There are plenty of costs in the racehorse ownership business.
First of all, if you don’t know much about horses, you’ll need a proper trainer, and the fee for a trainer is from $2,500-$5,000 per month.
Next, we have feeds that can set you back up to $800 a year for hay and grain, plus up to $2,000 for regular vet checkups (this doesn’t include health problems). You can also add $1,200 for farrier visits (every six months), and insurance ($1,000 basic coverage), which means that the total cost of racehorse ownership can go as high as $50,000 per year and in some cases even more.
Purses and Prize Money
Here’s the carrot: race winnings. A mid-tier stakes race might offer $100,000, with 60% ($60,000) to the winner—split after trainer (10%) and jockey (5-10%) cuts, leaving $45,000-$48,000.
The Kentucky Derby’s 2024 purse hit $5 million, netting $3 million for Mystic Dan’s owners after fees. Of course, big events like the Kentucky Derby are the focus of every racehorse owner in the world, but getting into the big league is difficult.
You are probably going to place a bet on the 2025 Kentucky Derby, and it will be much better if you bet on your own horse. But in reality, it is almost impossible for a newcomer in the industry to enter such a prestigious event.
This means that most horses don’t run Derbies—the average U.S. purse is $20,000-$30,000, and only 20% of Thoroughbreds turn a profit racing, per a 2023 Equine Industry Report. A horse running six races a year might earn $50,000-$100,000 if it wins half—not bad but barely covering costs unless it’s a star.
Making Money Through Breeding
If your horse retires a champ, stud fees can flip the script. Secretariat’s $6 million in 1970s syndication (adjusted to $30 million today) set the bar; Justify, 2018 Triple Crown king, commands $100,000 per cover, with 200 mares yearly netting $20 million.
Mares fetch less—$10,000-$50,000 per foal sold—but it’s gravy if they raced well. The catch? Only 1-2% of horses hit this elite tier; most geldings or mid-pack runners get nada. It’s a lottery ticket you cash years later—if at all.
Risk Factor
Horses are fragile—legs break, illnesses strike, careers end fast. A $50,000 yearling might never race if it pulls a tendon in training; 30% of Thoroughbreds don’t make a start, per recent Jockey Club stats.
Cars depreciate predictably; horses can go from asset to liability in a heartbeat. Market swings hurt too—breeding crashed post-2008, and 2025’s economic jitters could trim purses. Compare that to stocks: diversified funds weather storms; a horse is all-or-nothing.
The risk’s visceral—one bad step, and your investment’s dust.
Tax Breaks and Perks
There’s a sweetener: tax perks. U.S. owners can write off racing losses against income if it’s a business—feed, vet, training—lowering your taxable haul, says a 2024 IRS guide. Depreciation lets you spread the horse’s cost over the years, softening the hit.
Plus, the lifestyle—trackside seats, owner’s lounge—feels rich, even if your wallet’s not. It’s not cash flow, but it cushions the blow and adds bragging rights. Still, it’s a side dish, not the main meal.
So, owning a racehorse is quite expensive, and not for people with a tight budget. That’s why most racehorse owners are usually millionaires, and they don’t care about losing some money in the process.
