This could squeeze the cash flow of landlords at a time when rental growth may be limited by the UK’s economic uncertainty. And with house prices having the potential to fall depending on how the Brexit process moves ahead, being a landlord may become even less attractive.

With that in mind, here are two property-related shares which could be of interest. They appear to offer improving prospects and could generate higher returns than buy-to-let in the long run. As such, they could be worth buying in my opinion.

Growth potential

Releasing an update on Friday was UK healthcare real estate investor Impact Healthcare (LSE: IHR). The real estate investment trust (REIT) updated investors on pipeline acquisitions. It had previously announced that it was in advanced negotiations to acquire an identified pipeline of attractive investment opportunities which included a portfolio of UK care homes with over 2,500 beds.

However, it has now decided not to exchange contracts on the portfolio of assets during 2018. It will therefore not require an equity fundraising prior to the year end. It will, though, remain in discussions with the vendors of the portfolio and with other vendors of other attractive investment opportunities. It therefore expects to raise equity capital at some point in 2019.

The prospects for Impact Healthcare appear to be generally positive. An ageing population and increasing spending on the healthcare sector could lead to a tailwind for the industry in future. With the stock offering a relatively resilient outlook and a price-to-book (P/B) ratio of around 1, it could offer investment appeal for the long run in my opinion.

Total returns

The prospects for another REIT, Big Yellow Group (LSE: BYG), may also be relatively impressive. It has a dominant position in the self-storage sector, and this could provide it with a competitive advantage in terms of cost base and customer loyalty. It has relatively attractive locations, and its strategy suggests that further growth could be ahead over the long run.

The stock has experienced a period of volatility in recent months – in line with other FTSE 250 stocks which have a UK focus during the same time period. It now offers a dividend yield of around 3.9%, which is ahead of the FTSE 250’s yield of 3%. The company’s track record of dividend growth is impressive. It has been able to raise dividends per share at an annualised rate of 17% in the last four years. Although future dividend growth may not live up to its past increase, the performance of the business could remain sound.

Looking ahead, Big Yellow Group is expected to report a rise in earnings of 8% next year. Although the outlook for the UK economy may be uncertain, it could deliver impressive total returns in the long run.

The post Forget buy-to-let, I’d buy shares in these property companies instead appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Alongside this, the FTSE 100 continues to trade close to an all-time high. This means there may be fewer dirt-cheap stocks around. However, while that may be the case, here are two companies which appear to offer a potent mix of high yields and low valuations.

Solid performance

Reporting on Friday was real estate investment trust (REIT) Impact Healthcare (LSE: IHR). The company owns a diversified portfolio of healthcare real estate opportunities, particularly residential care homes. It has acquired 57 care homes since its IPO in March 2017, with an average net initial yield of 7.6%.

Encouragingly, the portfolio has been 100% let and is income-producing. This has meant that the company’s dividend was fully covered against its adjusted earnings in its most recent reporting period. With it on track to pay out 4.5p in the three quarters to 31 December, it has an annualised dividend yield of around 5.8%. This is twice the current rate of inflation and means that the trust may become more popular among income-hungry investors.

With a net asset value per share of 100p, Impact Healthcare appears to offer excellent value for money. It has a price-to-book (P/B) ratio of just over 1, which indicates that it may offer capital growth potential in the long run. With it being a relatively stable and resilient business model, it could also provide defensive characteristics at a time when the outlook for the UK economy is highly uncertain.

Growth potential

Also offering a mix of a high yield and low valuation is developer and operator of student property Unite Group (LSE: UTG). It has a strong growth opportunity due to the pressure on housing supply in the UK. While a large number of students are international postgraduate students, they are unlikely to be affected by Brexit as they often stay for one year or less. Therefore, demand for student accommodation could remain buoyant and lead to higher rents across the sector.

With a dividend yield of 3.3%, Unite Group offers an inflation-beating income return. Dividends are likely to rise over the medium term, since the company is forecast to grow its earnings by 7% in the current year and by a further 15% next year. Since it has a dividend coverage ratio of 1.3, shareholder payouts could rise by at least as much as profit growth. And with the company trading on a price-to-earnings growth (PEG) ratio of 1.2, it could offer significant capital growth potential.

The post 2 dirt-cheap dividend investment trusts that could make you a millionaire appeared first on The Twelfth Magpie.

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Peter Stephens does not own shares in any companies 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.

Dividend growth

Lloyd’s of London insurer Hiscox (LSE: HSX) is one such example. The Bermuda-incorporated insurer is set to lift its interim dividend by a penny per share to 9.5p, in a move which brings it closer to fulfilling management’s target dividend growth of 15% this year. This gives shares in Hiscox a prospective yield of 2.4% at the current share price.

The insurer said this morning that the net premiums earned during the six months to 30 June rose by 22% to £936.6m. This helped pre-tax profits, in constant currency terms, to climb 12% against the same period last year, to £133.5m.

When foreign exchange movements were taken into account, the figures looked a lot less cheerful as statutory pre-tax profits fell by more than half to £102.6m. However, it’s important to remember that currency volatility is only a short-term issue. Long-term fundamentals remain broadly intact, with the underlying combined ratio (a key measure of underwriting profitability), up by just 1.5 percentage points, to a still impressive 89.9%.

One of the key attractions of Hiscox is its growing retail business, which once again was its standout performer. The growth in retail continues to offset much of the weakness from its specialist London insurance business. Gross written premiums there declined 8% in the first half, compared to a 27% increase from the retail segment.

That’s because the pricing environment for larger premium, catastrophe-exposed lines remains tough as rating pressure continues amid excess underwriting capacity and historically low loss ratios. On the upside however, Hiscox had minimal exposure to some high-profile losses in the industry this year, including the Grenfell Tower fire and Cyclone Debbie, which hit Australia in March.

Demographic shift

Elsewhere, newly-listed Impact Healthcare REIT (LSE: IHR) could be a great pick for investors looking for long-term exposure to the property market. As an investor in residential care homes, this REIT looks set to benefit from two ongoing tailwinds, namely an ageing population and the chronic shortage of suitable properties for caring for the elderly.

The REIT’s property portfolio currently consists of 57 residential care homes, following the acquisition of the Seed Portfolio and Saffron Court in Leicester in May and June, respectively. And as is typical for the sector, Impact Healthcare benefits from long lease terms with upwards-only annual RPI-linked rent reviews. This enables the REIT to earn steadily-growing income and gives it significant protection against a potential downturn in the property market.

Looking ahead, the company sees a strong pipeline of attractive new potential investment opportunities, which includes further acquisitions and asset management opportunities. Subject to financing, it is set to move forward with plans to expand three of its existing homes to create 92 additional beds. With no debt in place at present, Impact Healthcare surely has plenty of potential for growth.

Shares in the REIT currently trade at a 5% premium to its net asset value, with a prospective dividend yield of 5.8% this year.

The post 2 dividend stocks for the long haul appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Jack Tang has no position in any 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.