diff --git a/README.md b/README.md
index ddcee39..dab6333 100644
--- a/README.md
+++ b/README.md
@@ -9,6 +9,14 @@ Generic project templates for tools, filters, libraries in C++.
 
 Type `make` to install the `mkproj` script, its man page, and the templates.
 
+The default location is to put everything inside your `~/.local` hierarchy, but
+you can change that by defining an environment variable `PREFIX`, giving it your
+desired root directory as a value, before typing `make`.
+
+The actual location used will be recorded in a config file:
+`~/.config/mkprojrc`, which will be read by the `mkproj` script. It needs to
+know where your templates are in order to function.
+
 ## Overview
 
 With `mkproj`, you can create a C++ project for a tool or a library.