Is Buying a Boat a Bad Investment?

How to decide if boat ownership is right for you

Being out on the open water is one of the best ways to spend your leisure time. Weekend fishing trips with your friends. A Saturday afternoon of water sports. Overnight adventures with the family. The ways you can make memories on a boat are endless. You’ve been saving up and making plans for that dream boat, looking at new models and local marinas.

Then, someone tells you buying a boat is a bad investment. That is not necessarily true, but if you are serious about buying a boat, you need to understand the realities of ownership.

Think you’re cut out for owning a boat? Today we are going to break down how to figure out if buying a boat is a good idea for you. Boat ownership can be a rewarding experience if you plan ahead and do it right. You can even make some extra money renting out your boat when you are not using it.

Initial costs

Your initial investment will depend on the kind of boat you are looking to buy and if you are purchasing a new or used vessel. You need to think carefully about what activities you will want to do on your boat. If you want to take weekend fishing trips with your friends or do water sports, a speedboat might be right for you. Families who want to take multi-day trips, or people looking to make an income renting out their boat might opt for a mid-size yacht or luxury live aboard.

When planning your purchase, take into account both the sticker price of the boat and the associated sales tax you will be liable for, in states with boat tax this can range from 2% all the way up to a whopping 10% in California. Even if you buy your boat in a place with no or low sales tax, you may still be liable for it in your home state or country. Besides the initial price of the boat, there will be more upfront costs. Other costs will include registration, lifejackets, safety gear, navigational equipment, insurance, marina fees, or a trailer to transport your boat.

Keep in mind that a lot of boats can be used for different kinds of activities. Be mindful of what you will use your boat for, and who will be on it. A boat is a long-term investment, so make sure you choose a vessel that will meet all your needs on the water.

Recurring Costs

When deciding if boat ownership is right for you, take the time to budget for recurring costs. These include property taxes, insurance, gasoline, mooring and storage fees, maintenance, and repairs.

If not budgeted and planned for, yearly boat costs can come as a hefty surprise and financial burden. Create a well-thought out budget and make a plan to prepare for these costs. Consider using your boat to drive in some income to help recoup some of the costs.

Property Tax

If you live in a U.S. state with property tax on boats, you will pay an annual tax based on the assessed value of your boat. Depending on the state, U.S. boat owners may also be liable for taxes on their trailer and boat motor. If you store your boat out of state, you may still be liable for property taxes in your home state. Do your homework to make sure you are tax compliant on your new boat.


Having good insurance is important. Insurance can protect you from accidental damage, theft, and liability costs. The cost of insurance will depend on where you live and operate your boat and the size of your boat and motor. Marinas will likely require you to have basic liability insurance. If you plan to transport your boat on land, make sure your insurance covers you both on and off the water. If you are doing water sports with a speedboat, you may want higher liability coverage for collisions or medical emergencies.

Storage and Mooring

Storage costs will vary based on location, climate, and whether you use a marina or opt for self-storage.

The least expensive option is at-home dry storage. This is a good option for owners with a vehicle that can tow a boat, a large enough yard or garage, and the willingness to haul their boat every time they use it. Depending on where you live and the size of your boat, self-storage can be inconvenient and leave you more vulnerable to theft and damage.

The more preferred storage option is wet storage at a marina or boat club. Docking and mooring fees are based on location and boat size. Depending on the climate, your boat may or may not be usable year-round. Consider the costs of both in-season and off-season storage if you live in a climate with cold winters. You need to factor in both costs and lifestyle preferences when you decide how to store your boat. After all, your time on the water is precious.

Daily Operations

It also important to consider the costs of operating your boat during each use. How much gasoline will your boat use? A sailboat might be a better option for the boat owners that want to cut down on gasoline costs, but, sailboats require more skill to operate.

Can you or do you want to operate your own boat? Will you need to hire a captain every time you hit the water? These are important things to budget for. You definitely don’t want to miss out on water time because of unexpected costs.


If you are going to invest in a boat, plan to also invest a lot of time and money into maintenance. A well-maintained boat is safer and keeps its value longer.

You will need to perform monthly and yearly checks and maintenance on your vessel. Clean and inspect the engine, electrical, and steering systems to prevent breakdowns. No one wants to get stuck out on the water.

Less frequent upkeep will include fresh paint, new carpet, floor repairs, and deep cleaning. Regular, scheduled maintenance will prolong the life of your boat, and safeguard against problems. Even with a well-polished maintenance schedule, things can happen. Avoid disruptions in use by having extra cash set aside in case of an unexpected repair.

Time and Labor

Financial costs aside, boat ownership can be a lot of work. How much of it are you willing to do yourself? Handy boat owners may enjoy spending time maintaining their boat themselves. Others just want to be out on the water and will be happy to pay someone else to do the upkeep on their boat.

Regular labor on the boat will include cleaning, regular maintenance, and small repairs. Nothing too tough. Transportation and winterizing the boat can also be a lot of work. Making sure your boat stays protected throughout the seasons is important. If you plan to store your boat outdoors during winter, the beginning and end of boating season could be a lot of work for you.

How much work you will need to do will vary depending on lifestyle, mechanical ability, and budget. Either way, there will be a significant recurring investment of your time and money.

When deciding how much labor you are willing to do yourself, if you factor in the actual time you will spend on the boat chances are you are getting a beneficial return on your time and money.

If you decide that buying a boat is the right decision for you, renting your boat out when you are not using it is a great way to offset investment costs. After all, boats are meant to be on the water, aren’t they?

To Boat or Not to Boat?

Regardless if you rent or own, taking up boating as a lifestyle is incredibly rewarding. If you want the occasional fun on the water without the work, then daily rental on Boatsetter may be a good idea for you. A few trips out with an experienced captain may help you decide if this is the right time to make the investment.

Planning ahead can help you ensure that you make the right decisions when buying a boat. Even with the extra work and recurring costs, it will be a rewarding experience if you do it right. Owning a boat can set a course for a lifetime of enjoyable fun on the water.

Take the time to figure out what all the costs of boat ownership would be for you and divide that number by how many days you will spend on the water each year. Then, compare that to what a daily rental would be and multiply it by how many days per year you plan to go out.

If the number of rentals surpasses the yearly budget, then boat ownership may be a great option for you. Renting your boat out on Boatsetter is a great way to offset yearly costs!


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