In the City of London (think Wall Street but a bit bigger) they talk about volatility.

I'm seeking a market with: - good cash flow- decent appreciation - low volatility- ideally reachable in 2-3 hours (by car or plane) from San FranciscoThanks!

If the lease has an escalation with an economic index, look to the historical indexes as to the volatility and %n changes to estimate the future cash flow.    

This doesn't make sense to me since usually investments are volatile on both ends (up and down), not just up.

That means more volatility, more risk of non-pay, vacancy, vandalism, abuse etc.

It may also be part time W2 perhaps, or W2 income with out 2 years track/history, or is so volatile, based on 100% commission, or bonus, or other variable nature that the CU's credit policy has completely negated it.I doubt if your W2 income was full time salary for 2+ years with the same company that it would get negated, as an example.

In addition, vacation rental are very volatile.

Just watch out for REITs with really high dividends - these are the most volatile.

I find that there is much more volatility in deposits; in tough times the applicants don't have the deposit money, so the going rate gets scarily low.  

I just don't know enough about the financing options that could provide a hedge against future interest rate volatility because I suspect for a leveraged buyer, that has to be a significant concern with an investment like this.