The light bulb of this boat turns ON when the boat/ship is placed in the water. The boat has a BJT transistor water sensor that activates the light bulb.

However, a simpler and cheaper circuit is published here:

https://www.instructables.com/id/LED-Water-Beacon/

This sensor can also be implemented with a MOSFET transistor:

https://www.instructables.com/id/MOSFET-Touch-Lamp/

You can see my boat working here:

Step 1: Design The Circuit

The circuit is designed with a simple power NPN BJT transistor fixed bias circuit and drawn with https://circuitcanvas.com online software:

I used an old 12 V light bulb that was made for motorcycle signalling or back lights. At the rated 12 V light bulb supply voltage, the average DC (direct current) for my light bulb was 0.1 A. This current value is dependent on light bulb design and production tolerances. At smaller supply voltages, the light source current will a lot less. However, modelling the equivalent resistance of the light bulb or a bright LED is beyond the scope of this article. You can use an ammeter to check how much current your light source is consuming. 

You can also make the circuit with a bright LED. However, a bright LED would not need the transistor. It can be connected directly to water.

Rc1 is used for short circuit protection and might not be needed. If the light bulb current is 0.1 A, then the voltage across the Rc1 resistor will be:

Rc1 = Ibulb * Rc1 = 0.1 A ** 1 ohms = 0.1 V

The power across the Rc1 resistor will be equal to:

Prc1 = Irc1 * Vrc1 = Irc1*Irc1*Rc1

Rc1 = 1 ohms: Prc1 = 0.1 A * 0.1 A * 1 ohms = 0.01 W = 10 mW

We also need to calculate the minimum transistor base current needed to fully turn ON the light bulb.

Minimum collector current for light bulb:

IcMax = 100 mA

Minimum base current for light bulb:

IbMin = Ic / Beta = 100 mA / 100 = 1 mA

The maximum equivalent resistance of water will equal:

Rw = (Vs - Vbe) / IbMin = (9 V - 0.7 V) / 1 mA

= 8.3 V / 1 mA = 8300 ohms = 8.3 kohms

That means the resistance of water is not actually 1 Megohm as shown in the circuit. However, this is just an approximate value. Modelling the resistance of water is beyond the scope of this article. It is always best to assume the worst-case scenario, a high resistance value, to ensure that you design the circuit to work for the worst conditions.

Step 2: Build The Circuit

Note: The power transistor is placed face down on the photo below. You do not need a power transistor and heat sink if you are using low-current bright LEDs.

Insulate the wires with electrical tape:

The red and the white cables will be placed in the water. They are connected to the bottom of the boat.

Step 3: Attach the Circuit to the Boat

You can use any packaging material that floats on water or a piece of wood.

Step 4: Drill Hole for Lights

Drill a hole for the light bulb with scissors.

Step 5: Attach the Cabin

Attach boat parts with ropes and a rubber band.

Step 6: Testing

I attached the 9 V battery to the boat with a rubber band because my boat capsized a few times due to a loose battery (the heaviest part of the boat), thus affecting the boat's centre of mass.

I tried placing the boat in cold water:

I also tried increasing the Rc resistor value to 10 ohms:

The light with Rc = 10 ohm appears to be very dim.