You Can Own a 2019 Boston Whaler for Free and Here’s How
Using Tax Incentives and Boatsetter to Offset Your Costs Entirely
By Riley Draper
The recreational boating industry is seeing some of the largest increases in growth since 2007 and it’s not stopping anytime soon. In fact, according to the National Marine Manufacturers Association, which is responsible for representing the nation’s recreational boat, engine, and marine accessory manufacturers announced that powerboat sales in 2019 were up 4% with another 4% of growth projected by September 2019. That’s an 8% increase in growth in just under two years and it proves that there has never been a better time to be out on the water than in 2019.
In his recent article, “How to Own a Tesla Model 3 for Free,” Dave Schools gives his readers the rundown on how he and other Tesla owners strategically went about financing their brand new Tesla Model 3 cars, got tax incentives, and rented out their Teslas on the ride-sharing app Turo to eventually pay off their monthly car mortgages and ultimately the car outright. In this case example, he illustrates how many people are actually getting their Teslas for free and even end up earning more money from this forward-thinking strategy.
After reading the article, our team at Boatsetter, the world’s largest marketplace for boat rentals, began to make the point that it isn’t just Teslas that can be owned for free. In fact, with the sharing economy developing more than ever in 2019, there are a lot of things that can, and ultimately, will be owned for free and we’ve seen firsthand at Boatsetter that boats are definitely one of them.
That’s right. Just imagine yourself cruising effortlessly with no emissions down the water on one of X Shore’s Electreka 8000’s or one of the new Boston Whaler Dauntless center consoles at no expense to yourself. Now, that’s a strategy we can support.
With thousands of boat owners and boat renters in over 600 locations across the world when it comes to boating, we have seen it all. In fact, many of Boatsetter’s boat owners have taken advantage of a similar strategy and have already been able to scale their business from the extra profits they originally made off renting out a single boat. According to data pulled from one boat owner who rents his boat out on the online marketplace and chose to remain anonymous, his annual earnings increased from $2,332 in 2016 to $37,136 in the first half of 2019 with total earnings over the course of three and a half years topping out at $82,154.
Now let’s take a look at the costs of boat ownership:
- Purchase price: varying from the type of the boat and if used or new (in our case study, we will use a brand new Boston Whaler 170 Dauntless)
- Insurance $3,000 per year
- Registration $55 per year
- Storage: $6,336 per year
- Maintenance $319 per month
- Navigational equipment: $216 per year
When asked about boat ownership costs another boat owner using Boatsetter’s rental service said,
“By far the biggest expenses are maintenance and storage. I keep my boats in dry storage which is great for the boat and really convenient. However, it comes at a big expense. Fortunately, I’m able to cover my monthly storage costs with only a few rentals each month.”
So, if you’re looking to buy a 2019 Boston Whaler 170 Dauntless, one of the best center consoles on the market, you’re looking at a price tag of $38,345 with financing at $253 per month. When you tally in all the other costs of maintaining and storing the boat along with additional costs such as insurance, you’re looking at a total of $16,478 in total annual costs.
Without financing the boat, your total costs of boat ownership for the first year would be $51,787.
Juxtaposing these earnings with the costs of boat ownership, we discovered that the average boat owner that buys a brand new Boston Whaler 170 Dauntless with or without financing could pay off the entire cost of the boat along with additional annual boat ownership costs within and without financing in just under two and a half years.
Now let’s dive into tax incentives.
Additionally, while the IRS does not offer tax breaks to boat owners using their boats for entertainment purposes, they do offer tax breaks to boat owners that use their vessels for taking out charters and for renting them out, much like a home that you would rent out to another individual. Since many of Boatsetter’s boat owners are using our online marketplace to do both, then these tax breaks can be granted to them. In fact, in the 2018 tax legislation, there are new provisions that could provide considerable federal tax benefits to purchasers of boats, both new and pre-owned, through 2022.
According to Sean Stanton, a successful charter boat business owner located in West Palm Beach,
“I would say that the main tax incentive that you can take advantage of is the fact that you can depreciate the cost of your boat over time which can heavily offset your income. You can also deduct other expenses you incur such as maintenance, mileage, etc.”
To qualify for these benefits, the buyer must be an entity (ie. a corporation, partnership or LLC) that will rent or charter the vessel or use it for another legitimate business purpose. So long as that requirement is met, then 100% of the purchase price can be written off as “bonus depreciation” in the year of the purchase.
So if you’re looking to buy a boat as a business owner and want to offset the costs of boat ownership entirely while growing your business, you can set up a business entity and purchase the boat for business purposes. Along with the additional revenue from renting the boat out to renters on Boatsetter, the sky is the limit. As Stanton said,
“It’s possible to pay off your entire boat using Boatsetter, but in order to do so I think that you really need to treat it like a business. If you approach it that way you can actually turn a profit independent of any tax incentives.”