I like Howie McMichaels point that the waterline ought to look that of a real boat. Taking it one step further, a waterline could even be 'projected' on the hull for maximum realism. To do that, one only needs to determine the true waterline at the bow and stern using the bathtub and chalk dust method. Once that is done, the boat needs to be held by the keel supported over a flat, level counter top such that the boat is level from side to side and the bow and stern waterline marks are equal distance from the counter top. Then by devising a simple jig that will hold a sharp pencil at the waterline height and that can be slid along the counter top, you can easily and accurately mark the hull for one edge of the waterline. Adjust the pencil position for the thickness and position of the waterline you want and mark a second line. Mask and paint.