I don’t believe investors have to spend huge sums on individual shares to make big returns. Here are two ultra-cheap UK shares I think could help me make a packet in the years to come.
Building big returns with residential property
Once upon a time I considered buy-to-let to be a great way to invest cash. It’s not a view I still subscribe to however.
Don’t get me wrong. I believe getting a slice of the property rentals sector remains a good idea. Home prices in the UK continue to soar. And thanks to a chronic shortage of available rental properties, the amount landlords can charge is rising sharply. However, I’m giving buy-to-let a miss because the costs and the paperwork that landlords now face have exploded in recent years.
This is why I’d buy PRS REIT (LSE: PRSR) to grab a piece of the action instead. This penny stock invests in newbuild family homes and, as of September, had a whopping 4,291 homes on its books. The company has recently raised cash via a share placing to keep growing its portfolio too. It is aiming to have 5,700 rental homes by the end of this fiscal year.
These targets could fall by the wayside if well-publicised building product shortages hit production rates. These current supply problems could also push costs much higher. Still, I think PRS REIT is a great — and importantly — simple way to play what I expect to remain a highly lucrative market.
Oh, and one final thing. The former penny stock’s status as a real estate investment trust (REIT) means it’s obliged to pay nine-tenths of annual profits to shareholders by way of dividends. This means investors like me can realistically expect to receive fatty dividends year after year. Indeed, the dividend yield here sits at a market-beating 4% for the current fiscal period.
A cheap UK share for the green revolution
Sylvania Platinum’s (LSE: SLP) a cheap UK mining share I’m thinking of snapping up right now. I think it could prove to be a great way to play the green revolution too. This is because the platinum group metals (PGMs) it produces are essential in the production of autocatalysts. Here, they are being deployed in increasing amounts to reduce emissions.
I also like this South African metals producer because it gives me the chance to exploit the bright precious metals price outlook. I expect demand for safe-haven assets like PGMs to remain strong as inflationary pressures increase, the Covid-19 crisis drags on, and tensions between major economies and trading blocs (like the US and China) intensify.
Profits at Sylvania Platinum could disappoint if the complex nature of its operations experience problems. But, all things considered, I think this is another attractive UK bargain share for me to buy today.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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