San Miguel de Allende, Guanajuato, Mexico.   "All You Wanted To Know About Living In San Miguel" the ad in the weekly edition of 'Atencion' offered. Just show up and I could learn all about buying or renting property here.

So I rushed up the street, which changes from Pila Seca to Cuadrante, to Hospicio in five blocks, and turned into a deep, softly green courtyard opposite the Sierra Nevada hotel. I was the last of 13 people from all over the U.S. and Canada who arrived and Michael Herrera was already speaking.

Mr. Herrera, a handsome man with a radio voice, was born and raised in Los Angeles but spent summers in San Miguel with his grandmother. Eventually, he moved here and started a real estate business that is now, by his reckoning, one of the six agencies in town that do most of the business. (His firm's website is: www.sanmiguel-mx.com )

He tells us, very quickly, that San Miguel real estate has appreciated greatly in the last twenty years and that the central historical district remains the focus of attention for most people. The amount of development in recent years, however, has led to a slowdown with an increasing supply of homes for sale. It may, he says, be a buying opportunity.

After the seminar I introduce myself and ask if he would spend some time showing me properties that might be suitable for retirees--- those ranging, say, from the very lowest cost to no more than $300,000. We spend two long mornings visiting houses in and out of the city, condos, and buildings that are in the last stages of completion.

  I learn that I could buy a 900 square foot town house with two bedrooms and one and a half baths in La Luz, a nearby suburb of San Miguel, for about $40,000. I could also build a new property of the same size for about $65,000, buy an existing and slightly larger home in a desirable section of town for about $85,000. Increase the ante still more and I could have bought a two bedroom, two-bath condo with magnificent views from a gigantic roof terrace--- but it just sold for about $135,000. Get a little fancy and the widow of an English Barrister is selling an elegant 3 bedroom, two and a half bath house in a prime area of San Miguel for about $250,000.

And, of course, it is always possible to spend much, much more.

As he said, San Miguel is not cheap. No mansions for the proverbial song.

But add the views, the beauty, the stone, brick, and tile work--- not to mention the incredible climate--- and these houses would cost far, far more in the United States.

The arguable advantage of price, however, isn't the end of the story. The real benefit of housing in Mexico is in the details:

•           Like it or not, your probably won't have a mortgage because most                houses are sold for cash. So if you've got the money to buy, you                won't have a monthly payment. This also works to make a more                solid market--- you'll never be surrounded by foreclosures.

•           Taxes are very low. While most houses in the United States are                taxed based on values that approximate market, appraisers here                value houses. Their valuation is significantly below recent                market prices. As a consequence, tax bills of $200 a year for a                $100,000 plus condo are common.

•           Operating expenses are very low. With a year round temperate                climate, San Miguel has only a handful of homes with central                heating and even fewer with air conditioning. During our weeklong                stay we used the gas log in our fireplace--- the most common                source of heat in San Miguel--- on only one night. So gas and                electric bills are low. Water bills are also low. And insurance                bills, if any, are small because fire hazards are limited and                people aren't as litigious as in the United States.

•           Add all the costs, including a part-time or full-time maid, and                a typical house can be run for around $300 a month. The cost of                operating a house is a fraction of the cost of operating the                same house in the United States even though it includes something                that very few Americans can afford--- household help.

The caveat side of the story is just as powerful.

Establishing reasonable measures of value isn't as easy in Mexico as it is in the United States because there is no Multiple Listing Service. With no pooled market of properties it takes longer to discern values. I think this puts a real "due diligence" monkey on any buyer. It means that you need to read, and check out, newspaper advertisements and click through as many websites as possible. (Atencion, the weekly publication in English, has plenty of rental and sales ads and you can see quite a few houses for sale or rent on the website, www.infosma.com )

In a short visit to San Miguel so many people fall in love with the city and buy a house in a matter of days that property is regularly for sale simply because the buyers plans have changed or their infatuation has faded. In my two days of looking I found two houses that had been owned for less than a year and occupied for still less.

Which brings us to the rental market.

Unlike most cities in America, San Miguel has a well-developed market of completely furnished houses, condos, and apartments. Rents start around $300 a month, frequently include all utilities, and often include maid service. It is also possible to do long term rentals of unfurnished houses. What is striking about the rentals is that the monthly cost is significantly lower than you would expect from the purchase price. I found one two bedroom condo in a complex with a health club, for instance, that could be rented--- furnished--- for $700 a month but was offered for sale at $160,000.

Few rental-to-sale-price "spreads" are that dramatic but the message is very clear: this is a buyers market all the way down. No one needs to "panic buy" a house in Mexico because you can rent when you want for as long as you want. Nothing bad will happen to your money while you are renting. Indeed, if you are thinking of becoming the Ultimate Snow Bird and traveling to Mexico for the winter months only, renting makes more sense than buying.

Finally, there is the rest of Mexico. It's probably cheaper than San Miguel, which means you have a lot of exploring to do.

Ken Luboff, author of "Live Well in Mexico: How to Relocate, Retire, and Increase Your Standard of Living" sold his house in San Miguel a year ago and is now building a house in Ajijic, by Lake Chapala where costs are lower and the climate, I am told, is even better.

Bottom line? Go slow. But go.