They caught ‘Yellowstone’ fever—and now run a ranch

Yellowstone. The Madison. 1923. Dutton Ranch. A stampede of neo-westerns proves that America’s obsession with ranch life is alive and kicking like a rodeo bull. Homebuyers are also weighing in with their wallets: Ranch prices are up 112% over the last decade to an average of $769,000, leaving regular real estate’s 66% gain in the dust.

But is owning a ranch all it’s cracked up to be? Investors who’ve ridden off into this sunset have plenty of hard-won wisdom to share.

Start with a “hobby farm” rather than a huge ranch

Marketing executive Debi Hammond was living on a half-acre in a California suburb with her husband and three kids when she got the itch for more space. They moved to five acres and joined 4H, but that wasn’t enough. So they went all in on 400 acres in Wyoming. “We thought it was huge!” Hammond recalls. “We quickly learned that we’re considered ‘hobby ranchers’ given the size of our herd.” They started with four cows, figuring nature would take its course, and the herd would grow organically. Nature obliged come “calving season.”

“My husband woke me up in the middle of the night saying he needed help with a calf,” Hammond recalls. “After wearing pencil skirts and four-inch heels for 20 years, I had to put on Carhartt bibs and head out into a storm with below-freezing temperatures to save a calf that would die had we not brought it into the barn. It’s a real thing with ranchers. It’s money, so you want to make sure everything goes right. That was a huge lesson early on.”

Beware the “ag rollback”

Nychole Baxter, a rancher and Realtor in Texas, has seen ranch fever lead plenty of buyers astray. “Price per acre is the number everybody looks at, and it decides almost nothing,” she says. “What matters is how much of the acreage you can use, how it holds up in a dry August, and whether the road you drove in on is a recorded easement.”

The most expensive mistake of all is the “ag rollback”: In a nutshell, agricultural land may have an “ag valuation,” meaning it’s taxed at a lower rate—but only if you keep farming or grazing it as intended. “Take a place out of ag use, and [they’ll] come back for the difference,” Baxter warns. To avoid this, contact the appraisal district before you buy, build, or change how any piece is used. “When we bought our ranch, we had to provide proof we were continuing, such as our livestock bill and photos of the animals.”

Ranches are rarely cash cows

A ranch can wear a lot of hats economically: produce, meat, agritourism (Hammond added an Airbnb to give guests a taste of ranch life). But this doesn’t mean it’s easy money. Now five years in, Hammond’s ranch is still in the red. “The cattle and Airbnb bring in some income, but we’re putting in more than we’re getting out since we’re building the herd,” she explains. And that’s fine by her, since she’s not chasing a quick flip.

“Long-term, the goal is to make this a profitable business. It’s definitely an investment. But it’s mostly a lifestyle,” Hammond says. “We love the land, the freedom, the outdoors, the animals, the views of the Yellowstone River; it’s spectacular.”