With the real estate market falling apart in the U.S., many homeowners - especially already retired Baby Boomers - have their homes on the market with plans to take their profits and move to Mexico. Enter the advertisements for "to-be-developed" gated communities, usually "on the beach," in Mexico. These condos and homes are for sale all over the internet now, with some of the most beautiful photos and descriptions of dream communities ever seen. What's the old saying? "If it sounds too good to be true......."

Perhaps there are a few things the potential gated community in Mexico investor should think about before risking their hard earned retirement funds in what may turn out to be someone else's dream.

In the first place, why would anyone plunk down what is sure to be hundreds of thousands of dollars, and sometimes many many times that amount, for a condo that is just one little part of a huge project that hasn't even made it off of the drawing board yet - much less through the application and approval process? In Mexico, that could take years and those are years that retirees' investment dollars will be tied up (at best) and - at worst - lost. The watchword here is: The potential investor should aggressively investigate the company he or she is considering doing business with as if their financial life depends on it. If this is the company's first development in Mexico, then it should probably not be the novice real estate investor's first investment there.

Second, the potential investor in Mexico real estate should be more than cautious about buying anything in a development on or near a beach until they - and their own Mexican attorney - fully understand the beach laws in the area. The last thing anyone wants is to discover, after their money is gone, that the beach laws will not allow the development to proceed. Of course, the seller will be more than happy to suggest an alternate location, but that isn't what the investor bought and there is then every chance that what they bought will not be what they end up getting. If this happens, the sadder and wiser investor can probably forget about getting his or her money back, at least not without huge legal fees.

Finally, the potential investor in Mexico real estate should really think long and hard about why they think they want to invest in real estate in a gated village in Mexico. What is their purpose for moving there? They can certainly have much more house for the money outside of one of these gated developments. Will the fees associated with living inside the village make their cost of living more than it was in the States? Will insulation from Mexican society diminish the quality of their life in Mexico? Are American and Canadian potential investors buying into the high crime propaganda about Mexico? That scare tactic can be totally wiped away by a simple reading of the national crime statistics and looking at where crimes occur.

All of this is not to attempt to keep anyone from choosing to live in a gated community in Mexico. It is, however to warn potential investors to be very careful about who they do business with, about doing one's homework with respect to the development laws in the area of choice, and to suggest that careful thought be given to whether one really wants to live an insulated life in one of the most interesting countries in the world.

Image courtesy of Yucatan Living