Some people have been moved from centrally located homes after issues of criminal damage, assaults on staff, suicide attempts, self harm, threats to kill and child abuse, have taken place.
It led Bridgend council to house some youngsters outside the county.
The authority said it was developing future options for in-house services.
A review by the corporate director of social services and wellbeing, looked at the council's two children's residential homes, Sunnybank and Newbridge House.
Meetings with owners looked at ways to reduce the number of children being cared for outside the county, which comes at a high cost.
It was acknowledged child sexual exploitation could be linked to the children's homes being centrally located and a reason for them being removed from placements early.
"Association with older people is linked to absconding [and] risk taking behaviour which again is linked to location," the report said.
"Isolation can help manage risk - our units are centrally located."
The report said installing CCTV could act as a "deterrent for the young people and also anyone who may potentially being intending to exploit them".
A spokeswoman for Bridgend council said: "Work will take place over the next three months on developing options for how effective in-house residential services can be provided in the future."
Young people living in care in Bridgend could be at risk of sexual exploitation because of where children's homes are based, a review has suggested.