Subspace-based fault detection algorithms have proven to be efficient for the detection of changes in the modal parameters for damage detection of vibrating structures. With these algorithms, a state-space model from the reference condition of a structure is confronted to output-only vibration data from a possibly damaged condition in a chi2 test on a damage detection residual. The outcome of this test is compared to a threshold to decide if there is damage or not. In this paper, the problem of optimal sensor placement for this damage detection algorithm is considered based on the statistical properties of the chi2 test. Using a model of the structure, sensor positions are chosen such that the non-centrality parameter of the chi2 distribution is maximized for a certain set of damages. It is anticipated that this approach would, indirectly, lead to a maximization of the power of the test. The efficiency of the approach is shown in numerical simulations.