Short-term lets are being used for drug-dealing, prostitution and as fronts for puppy farming operations, MSPs have been warned.
A Police Scotland chief inspector said the high turnover of occupants means several types of criminality are able to take place, including county lines drug dealing.
Holyrood is considering plans for a licensing system for Airbnb-style properties which would be in force by 2024.
The police said they are supportive of the plans as they would allow authorities to establish “fit and proper” operators.
Setting out intelligence on criminality, written evidence to the Scottish Parliament’s Local Government Committee said: “There are prostitutes moving about Scotland utilising short-term lets, advertising their services and travelling to the areas where there is potential business.”
It continued: “Drug dealing takes place whereby a drug dealer houses themselves at a short-term let, most recently in relation to county lines investigations.”
Anecdotal cases from the SSPCA also indicate that short-term lets are being used by puppy farmers to provide a “nice” property purporting to be the owner’s home.
Chief Inspector Nicola Robison and representatives from local government and community groups spoke to the Holyrood committee on Tuesday.
She said: “There are powers that exist at the moment in respect of the legislation that we can use; however, what we do find is that creates certain limitations.
“That is primarily caused by the quick turnover of different persons from week on week, every weekend, which we then find very difficult to get that intervention and prevention opportunity.”
Other members of the panel called for the Scottish Government to reintroduce regulations against “overprovision” to the scheme.
In October, Housing Secretary Shona Robison said these would not be needed as councils have separate powers to establish control areas.
Ailsa Raeburn, of Community Land Scotland, said this shows a “fundamental misunderstanding” of the short-term lets control areas in planning legislation.
Tony Cain, policy manager at the Association of Local Authority Chief Housing Officers, said “fairly bold” action is needed to deal with the unmanaged growth of short-term lets.
Councils should choose which short-term lets can no longer operate, he said, such as those in tenement flats in Edinburgh where residents are experiencing problems.
Andrew Mitchell, regulatory services manager at City of Edinburgh Council, said there are 12,000 short-term lets in the capital, according to a conservative estimate pre-pandemic.
He said that including bed and breakfasts in the licensing scheme is sensible as otherwise a loophole in regulations will be created.
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