The clause mentioned is a prepayment penalty, where an extra percentage is paid to make up for it. 

Seems like unqualified tenants may increase vacancy, eviction and potential repair costs and in the long run, burn your cash faster.

I am looking at low down payment owner-occupied options through a portfolio lender at 5% with PMI, that will go away once reaching 80% LTV (so will get some extra cashflow after approximately year 7).In my analysis I account for Expenses including (common utilities, taxes, property management (10%), Long term maintenance (10%), short term maintance/repairs 95), legal, misc, vacancy (7%) etc, etc.)

Did you pay the extra and was it worth it?

This is a small home and I'm just using the extra cash to help me through college.

Many pets will be hard on your unit and you want to collect money for these extra upkeeps.

So glad we didn't waste extra time and money accommodating them.  

Just a few extra thoughts based on some of the additional comments. 

Make sure their security deposit is sufficient to cover the extra turnover costs and your extra risk.

If you are already in position and have the time for the extra job, flip away while saving the cream of the crop for investments!