Ranch life taps into the American desire for space, freedom and a connection with the land. Lately, owning a ranch, and selling the products raised on it, has emerged as an alternative investment class for those with deep pockets and a time horizon that stretches as far as the eye can see.

With prices for some prized ranches down as much as 30 percent and returns holding steady around 3 percent a year, ranch land is looking more attractive as an investment. But the returns are only part of the equation.

James E. Manley, founder of Atlantic-Pacific Capital, a boutique investment bank in Greenwich, Conn., said he never forgot his dream of being a rancher, even though he made his fortune in finance. “When I was a kid, probably 12 of the shows on TV were Westerns,” he said.

Mr. Manley said it took him 42 years, but after looking at 500 ranches, he found 6,000 acres in Montana in 2007 that fulfilled all his requirements, including having a river running through the property and not having poisonous snakes on the land. It is now the Ranch at Rock Creek, a high-end resort that is also a working cattle ranch.

“My son said, ‘I always thought it was just a dream,’ ” he said.

But as I found out, such dreams cost a lot of money to keep going. The land may be appreciating in value but the continuing costs are substantial. James H. Taylor, managing partner at Hall Hall, a broker that specializes in ranches, said some of the return had to come from being there. “It doesn’t make sense to own a ranch if you’re not going to come out and use it,” he said.

Ranches have always had a spot in a wealthy investor’s portfolio. Ted Turner may be known for founding CNN, but he also began buying ranches in 1987 and is now the second-largest individual landowner in North America, with two million acres spread across seven states, trailing only John Malone of Liberty Media. He sells the bison he raises, some to Ted’s Montana Grill, his restaurant chain.

As a pure investment, Mr. Taylor said, agricultural land has long offered steady returns, particularly as food prices have risen. According to the Farmland Index produced by the National Council of Real Estate Investment Fiduciaries, prices rose 8.6 percent last year and 6.19 percent in 2009.

But he categorizes farmland as the least fun type of land to own. The types of land he considers more fun — working ranches and private or dude ranches — have lower returns.

“Most people consider this a safe place to park your money,” Mr. Taylor said. “The alternatives are savings accounts, triple-A rated securities and government bonds.”

Depending on how someone buys and sells a ranch, there are special tax treatments for what the Internal Revenue Service calls like-kind exchanges, which can defer capital gains taxes, said Brian R. Gallagher, a tax partner at the law firm Davis Gilbert. (The same rule, known as 1031, can apply to other real estate transactions where the properties are owned as investments.)

Warren Burke, a lifelong rancher, said he bought his first ranch, 600 acres in Pinedale, Wyo., with $1,500 down in 1971. He traded three ranches, including one in Montana now owned by Tom Brokaw, the retired NBC news anchor, until he acquired the 8,000-acre EA Ranch in Dubois, Wyo., in 1989 for $1.4 million. Last October, he sold it for $7 million and traded down to a 1,000-acre ranch. He did not pay tax until he downsized.

“My whole deal was I was never in it for the profit,” he said. “I was in it for the lifestyle, trying to make it work and enjoying the work.”

He added, “Cattle are a business; the ranch is an investment.”

That is something would-be buyers should remember. These vast tracts of land are gorgeous and can increase substantially in value, but they can be difficult to sell or even value.

Some of them have no comparable listings. Take the Darwin Ranch in Wyoming. It consists of 160 deeded acres in a valley but is surrounded by the Gros Ventre Wilderness area. While it is completely private, it is accessible only in the warm months, by road or air.

“We don’t know what it’s worth,” said Loring Woodman, who bought it for $70,000 in 1964 after graduating from Harvard and has run it since as a guest ranch.

He said the ranch was sold in August 2008 for $8.5 million, but the buyer pulled out when Lehman Brothers collapsed. The ranch is now set for auction in September, with a minimum price of $4.5 million.

While these profits are eye-popping, those who buy a ranch and think they can just call it a business may be in trouble. The I.R.S. has a hobby-loss rule to keep gentleman farmers from gaming the system.

“If you buy a farm, throw some cows on it and you’re a major executive in New York City, you have to be careful,” Mr. Gallagher, the tax lawyer, said.

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