diff --git a/docs/freqai-configuration.md b/docs/freqai-configuration.md
index d24c60057..737f64824 100644
--- a/docs/freqai-configuration.md
+++ b/docs/freqai-configuration.md
@@ -206,6 +206,9 @@ If this value is set, FreqAI will initially use the predictions from the trainin
 
 FreqAI has multiple example prediction model libraries that are ready to be used as is via the flag `--freqaimodel`. These libraries include `Catboost`, `LightGBM`, and `XGBoost` regression, classification, and multi-target models, and can be found in `freqai/prediction_models/`. However, it is possible to customize and create your own prediction models using the `IFreqaiModel` class. You are encouraged to inherit `fit()`, `train()`, and `predict()` to let these customize various aspects of the training procedures.
 
+You can place custom FreqAI models in `user_data/freqaimodels` - and freqtrade will pick them up from there based on the provided `--freqaimodel` name - which has to correspond to the class name of your custom model.
+Make sure to use unique names to avoid overriding built-in models.
+
 ### Setting classifier targets
 
 FreqAI includes a variety of classifiers, such as the `CatboostClassifier` via the flag `--freqaimodel CatboostClassifier`. If you elects to use a classifier, the classes need to be set using strings. For example:
diff --git a/freqtrade/configuration/directory_operations.py b/freqtrade/configuration/directory_operations.py
index f70310ee1..e1313749b 100644
--- a/freqtrade/configuration/directory_operations.py
+++ b/freqtrade/configuration/directory_operations.py
@@ -3,7 +3,8 @@ import shutil
 from pathlib import Path
 from typing import Optional
 
-from freqtrade.constants import USER_DATA_FILES, Config
+from freqtrade.constants import (USER_DATA_FILES, USERPATH_FREQAIMODELS, USERPATH_HYPEROPTS,
+                                 USERPATH_NOTEBOOKS, USERPATH_STRATEGIES, Config)
 from freqtrade.exceptions import OperationalException
 
 
@@ -49,8 +50,8 @@ def create_userdata_dir(directory: str, create_dir: bool = False) -> Path:
     :param create_dir: Create directory if it does not exist.
     :return: Path object containing the directory
     """
-    sub_dirs = ["backtest_results", "data", "hyperopts", "hyperopt_results", "logs",
-                "notebooks", "plot", "strategies", ]
+    sub_dirs = ["backtest_results", "data", USERPATH_HYPEROPTS, "hyperopt_results", "logs",
+                USERPATH_NOTEBOOKS, "plot", USERPATH_STRATEGIES, USERPATH_FREQAIMODELS]
     folder = Path(directory)
     chown_user_directory(folder)
     if not folder.is_dir():
diff --git a/tests/test_directory_operations.py b/tests/test_directory_operations.py
index 905b078f9..8e49aab10 100644
--- a/tests/test_directory_operations.py
+++ b/tests/test_directory_operations.py
@@ -25,7 +25,7 @@ def test_create_userdata_dir(mocker, default_conf, caplog) -> None:
     md = mocker.patch.object(Path, 'mkdir', MagicMock())
 
     x = create_userdata_dir('/tmp/bar', create_dir=True)
-    assert md.call_count == 9
+    assert md.call_count == 10
     assert md.call_args[1]['parents'] is False
     assert log_has(f'Created user-data directory: {Path("/tmp/bar")}', caplog)
     assert isinstance(x, Path)