According to American Rivers, there are over 25,000 rivers that travel up to 3.5 million miles in the United States.
These rivers have a unique landscape and winds through valleys and low foothills, mountain forests, and more. They offer a serene and rewarding experience that anyone can want to explore.
A boat ride offers one of the best ways of exploring and experiencing what these rivers have for you. If you live near a river, sea, or ocean, the chances are that you have dreamed of owning a boat.
However, before you think about sailing, here are some things you need to know about boat ownership.
What Is the Cost of Owning a Boat?
The idea of having a boat sounds exciting and will allow you to create great memories and experiences. However, there is a lot more that goes into owning one.
There are different types of boats that you can choose to buy. Your choice will depend on your taste, budget, and location. The cost of having a boat goes beyond the purchase price.
Initial Purchase Price and Registration
The price of a new boat ranges from a few thousand to millions of dollars. For example, a fishing boat can cost anywhere from $25,000 to $100,000. You can get a sailboat for as low as $12,000 and a yacht for $300,000.
Financing a boat using a loan will require on-going repayments but using your savings upfront is a one off cost, this in the first step to boat ownership. The cost of registering the boat will depend on your state. Note that the size and model of the boat will also affect the buying price and the cost of registration.
Taxes
State tax laws on buying a boat vary. Depending on your location, you can pay a boat ownership tax equal to 10.5% of the evaluated value of the boat.
Some states like Montana, Oregon, and New Hampshire, do not have a sales tax, but the boat will remain in that particular state.
If the law in your state requires you to pay taxes, you can consider ways of reducing the tax deductions, such as:
- Registering the boat for business
- Registering as a second home
- Chartering
- Donating
- Using it for transportation
To qualify for deductions, you will have to prove what you are claiming to use the boat for.
Insurance
Boating accidents are a real threat. In 2020, the coast guard registered at least 5,265 accidents. This included 3,191 injuries, 757 deaths, and at least $62.5 million of damages.
The cost of marine insurance will depend on your insurer and several other factors. To set the price of the policy, insurers consider factors such as:
- Deductibles
- Boating/driving record
- Boating safety education
- Cruising area
- Towing insurance requirement
- Make and model of the boat
- Liability limit
To ensure you have the best, consider what is included in the policy and any other discounts the insurance company gives you.
Equipment, Accessories, and Storage
You will need to account for the cost of buying a first aid kit, life jackets, paddles, fuel/gas, especially if the boat is not wind-powered, navigation equipment, and more.
It is vital that you also budget for winter storage and docking at the marina. This can cost up to thousands each year.
Maintenance and Trailer
From general cleaning to dealing with normal wear and tear to painting, replacing sails, and more, the annual cost of maintaining a boat can be 10% of its price.
During winter or any other off-season, you will need to haul the boat to a storage facility or your backyard. This also comes at a fee that you have to budget for.
Other costs that you may need to have in mind are mooring charges, upgrades, off-loading, and depreciation. Unlike a house, a boat begins to lose its value the moment you buy it. Depreciation costs will vary according to the age, model, make, and condition of the boat.
Expect at least 10% depreciation in the first year of ownership and 7% depreciation in the following years. When you want to sell the boat, you should also factor in a 10% to 15% brokerage fee and the time it takes to market it.
Benefits of Owning a Boat
Though having and maintaining a boat is quite involving, there are several advantages of owning one. These benefits are worth the initial cost of buying a boat and what it takes to keep it running. Some of the advantages of having a boat include:
Fun, Bonding, and Recreation
We all like a bit of spark during the weekend, holiday, or whenever we have time. A boat will get you, your family, and friends out of the house so that you can experience nature while having fun.
Sailing away in a boat can encourage teamwork and bonding as everyone takes a turn to steer, anchor, raise the sails, and more.
While in the water, you can try out some fun activities such as fishing, diving, swimming, wakeboarding, and water skiing. Such activities also help in burning calories, building muscles, relaxing, and staying healthy.
Boating is also one of the best ways of relieving stress.
Promote Social Gatherings
Apart from making you a captain as you explore different islands, new fishing spots, and other places you have been dreaming about, boats are also an excellent venue for parties and any other social gathering.
You can have informal business meetings, family or friends get together, weddings, and parties as you sail away.
Second Home
Did you know that you can live in a boat? Having a boat as a second home is one of the best benefits of having a boat. You can register your boat as a second home, and it can qualify as a second home deduction. However, before you do this, you should speak to your tax advisor.
Choose a Boat That Suit Your Needs
Owning a boat has several advantages and disadvantages. When deciding to own a boat, you should consider the benefits of having one and the cons to determine if buying one is the right choice.
With proper planning and knowledge, you will be able to afford one and also enjoy having it. Continue browsing our website for tips on fashion, lifestyle, travel, business, gaming, and more.
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