Camera traps are used increasingly to estimate population density for elusive and difficult to observe species. A standard practice for mammalian surveys is to place cameras on roads, trails, and paths to maximize detections and/or increase efficiency in the field. However, for many species it is unclear whether track‐based camera surveys provide reliable estimates of population density. Understanding how the spatial arrangement of camera traps affects population density estimates is of key interest to contemporary conservationists and managers given the rapid increase in camera‐based wildlife surveys. We evaluated the effect of camera‐trap placement, using several survey designs, on density estimates of a widespread mesopredator, the red fox Vulpes vulpes, over a two‐year period in a semi‐arid conservation reserve in south‐eastern Australia. Further, we used the certainty in the identity and whereabouts of individuals (via GPS collars) to assess how resighting rates of marked foxes affect density estimates using maximum likelihood spatially explicit mark–resight methods. Fox detection rates were much higher at cameras placed on tracks compared with off‐track cameras, yet in the majority of sessions, camera placement had relatively little effect on point estimates of density. However, for each survey design, the precision of density estimates varied considerably across sessions, influenced heavily by the absolute number of marked foxes detected, the number of times marked foxes was resighted, and the number of detection events of unmarked foxes. Our research demonstrates that the precision of population density estimates using spatially explicit mark–resight models is sensitive to resighting rates of identifiable individuals. Nonetheless, camera surveys based either on‐ or off‐track can provide reliable estimates of population density using spatially explicit mark–resight models. This underscores the importance of incorporating information on the spatial behavior of the subject species when planning camera‐trap surveys.