Speaking in Epping, Essex, Ms Badenoch questioned whether it would be possible to "set up camps and police that, rather than bringing all of this hassle into communities".
She said modern solutions were needed and that rules from previous decades are not suitable for 2025.
Ms Badenoch also sought community input on asylum seekers, saying that the party does not have all the answers to the migration issue.
Her comments come amid increasing tensions over migration across the UK and government efforts to reduce it, including a new ‘one in, one out’ returns deal with France.