How to Buy a Boat

Boating is an activity that you can do for life. Few things equal the fun of getting out on a body of water and being captain of your own vessel, whether it is a canoe or a yacht. This brief guide will walk you through the initial steps to consider when buying a boat. There are myriad types of watercraft. The decision is far more complicated than buying a car.

Instructions

Difficulty: Easy

1. Draw up a list of activities you plan to do with your boat. These can include sailing, fishing, water skiing, racing, scuba diving, cruising, over night stays, portaging, wild fowl photography and hunting. As you draw your activity list, add multiple check marks to those activities that are most important, down to single checkmarks for those that you’d only do occasionally.
2. Select your preferred method of propulsion. I’ve sailed now for more than 30 years. Currently I’m the skipper of a California 25-foot sloop. Although I motor in and out of Marina del Rey for expediency’s sake, to me the essence of boating is when I turn the engine off and hear nothing but wind and water. Yet if you’re a water skier, you'd do better to own a power boat.
3. Be realistic about your budget. Boats are described as holes in the water into which you pour money. My mother lives on a lake in New England where she keeps an aluminum canoe. After buying it, there’s been no maintenance for the past 30 years. For more serious boaters, the costs never seem to stop. Just to keep my boat in the water, costs me $3,500 annually for slip fees, taxes and insurance, prior to any maintenance. One advantage I have over power boaters is because I don’t use much gas, my fuel costs for a full day of sailing Santa Monica Bay runs me less than $3. I’ve heard horror stories from power boat skippers who claim to have spent $200 a day for fuel alone, yet the rush they get from unfettered speed seems worth it to them.
   
   Your budget will determine a number of factors, including the number of people you’ll be able to accommodate as well as the size of your boat.
4. Decide whether you’re buying new or used. This is largely a function of budget. New boats come with warranties that very widely in their duration and what they cover. Manufactures have come and gone over the years. You want one to still be there to cover your new boat warranty. Many reputable manufacturers are members of the National Marine Manufacturers Association, which sponsors multiple boat shows around the country, a great place to browse.
   
   A reputable dealer or yacht broker can be quite helpful as well, although if you are buying a used boat, don’t rule out private party sales.
   
   If you buy a used boat, be sure to have it surveyed by a reputable marine surveyor. He should look at the hull and examine the entire boat from stem to stern. You can use his list of recommended repairs to negotiate a better price on the boat.
   
   Boat maintenance costs will very tremendously, depending on whether you buy new or used. Some experts say that you should as a rule of thumb expect to spend $50 a year per foot, just to keep a craft sound. If you buy new, expect to buy all the ancillary equipment you’ll need such as fire extinguishers, a marine radio, dock lines, flares, anchors, swim ladders and more.
5. Decide whether you’ll pay cash or finance. Believe it or not, in some cases it actually makes more sense to finance your boat. Why? If it meets certain criteria the interest can be tax deductible. If your boat has a galley, sleep quarters and a head, it can qualify as a vacation home under the IRS tax code.
   
   One of my friends structured a deal through his accountant where he periodically makes his boat available for charter, qualifying it as income producing property. Even though he financed his boat, his net cost of ownership for his tax bracket is quite low.