Glossary

Hard Asset

A hard asset is a type of asset with underlying intrinsic value that can be used to produce or purchase other goods or services. Hard assets typically include commodities such as oil, natural gas, gold, silver, and diamonds, as well as other tangible assets such as farmland and commercial real estate.

Hard Cost

Also called “brick and mortar expenses,” hard costs are any costs involved in the physical construction of a project. Included in hard costs are

Hard Money Loan

Hard money loan is a type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by

Health Insurance

Health insurance is a type of policy that protects an individual from being liable for the total costs of medical and surgical expenses incurred in the event of illness or injury. Employers often include healthcare insurance in benefits packages to attract highly skilled workers. Insurance plans often require policyholders to seek care from a defined network of care providers and dictate that policyholders pay a higher percentage of costs if they obtain care from providers outside that network.

Health Ratio

A health ratio, also known as an occupancy cost ratio, is the relationship between a retailer’s sales and total occupancy costs. A retailer’s health ratio for a given location is calculated using the formula of total annual rent (inclusive of reimbursements) of the location divided by its gross annual sales for that location.

Hedge

A hedge is an investment used to reduce an individual or entity’s risk of exposure to adverse price movements. It is an insurance policy that protects an investor against the downside risk associated with an investment in a particular security. A car manufacturer may hedge its exposure to fluctuations in the price of steel by purchasing a futures contract that will allow it to purchase steel at a fixed price over a specific period of time. This is attractive to the car manufacturer because it is able to project a stable budget over this period of time and reduce its exposure to a spike in the price of steel, which would result in a spike in its cost of production of a vehicle.

Hedge Fund

A hedge fund is an alternative investment vehicle in which an entity pools together resources in pursuit of alpha, the difference between an active investor’s returns and the market’s returns over a given period of time. Available only to accredited investors because of the lower level of regulation and oversight that other investment vehicles face, hedge funds typically charge a “Two and Twenty” fee structure, which is a two percent charge for the management of assets and a 20 percent charge for profits on the active management of its clients’ assets.

Held for Investment

Properties held for investment purposes can be any property or asset that are acquired and held for income production (rental or leasing activities) or for growth in value (capital appreciation). In order to qualify for tax-deferred treatment, property must have been held for investment or for business use. Property held for resale (e.g. inventory such as for-sale condo units) typically will not qualify for tax-deferred treatment.

HOA Fees

Membership fees that must be paid by an owner of property within a homeowner association’s jurisdiction. HOA fees are collected to pay for maintenance and improvements of properties owned by the association, including common areas or necessary features such as roofing or elevators. HOA fees are very common in condominium developments, but can exist in neighborhoods of single family homes.

Holding Company

A holding company owns other companies and allows them to perform daily operations with independence. The holding company owns the assets of each company and can step in as needed to make management decisions. Holding companies maintain control through majority voting stock within each company. Each business may only be partially owned by the holding company. When it is 100% owned, the business is a "wholly-owned subsidiary." Because each business within the holding company is allowed to run its daily operations, management is responsible for that business’s performance.

Holding Period

Holding period is the real or expected period of time which an investment is attributable to a particular investor.

Holding Title

Holding title refers to the legal structure in which title to real property is owned. In the sale of real property, the title must be transferred from the seller to the buyer

Homeowners Association (HOA)

Homeowners Association is an organization within a living community that creates and enforces a set of rules for the properties within its jurisdiction. Residents that own property within an HOA’s area of authority automatically become members and are subject to HOA fees. Property types that are often apart of associations include subdivisions, planned communities, or condominiums.

Homeowners Insurance

Homeowners insurance covers losses and damage to a resident’s home. Coverage includes external and internal losses but will vary depending on the insurance policy. When getting a mortgage, most lenders will require that the resident has homeowner’s insurance. The insurance payment is bundled into the escrow account for the mortgage company and paid with the monthly mortgage payment.

Housing and Urban Development (HUD)

The Department of Housing and Urban Development (HUD) is a government agency that enforces the Fair Housing Act. The Fair Housing Act enforces discrimination in housing based on sex, race, color, national origin, and religion for renters and homeowners alike. HUD is meant to foster community development and homeownership. HUD is most visible in its assistance to low-income people and those who are disadvantaged with disabilities. Through its enforcement of the Fair Housing Act, HUD ensures that landlords are not able to take advantage of people through false claims of availability, application denial, different terms, or (negative) conditions that are different from those of other tenants.

Human Capital

Human capital is an intangible measure of the quality of a firm’s employees. The level of a firm’s human capital can be gauged by the level of education, experience and skills of its employees. Though it cannot be measured on a balance sheet or various other financial statements, human capital is critical to a firm’s success. Higher quality human capital will translate to increased productivity and profitability. Firm’s can grow human capital by compensating employee’s fairly and/or offering attractive benefits to workers in exchange for exceptional performance.