diff --git a/doc/raketasks/backup_restore.md b/doc/raketasks/backup_restore.md
index 95221d8b6b1..2e7702dda07 100644
--- a/doc/raketasks/backup_restore.md
+++ b/doc/raketasks/backup_restore.md
@@ -326,6 +326,16 @@ For installations from source:
 
 1. [Restart GitLab] for the changes to take effect
 
+#### Specifying a custom directory for backups
+
+Note: This option only works for remote storage. If you want to group your backups
+you can pass a `DIRECTORY` environment variable:
+
+```
+sudo gitlab-rake gitlab:backup:create DIRECTORY=daily
+sudo gitlab-rake gitlab:backup:create DIRECTORY=weekly
+```
+
 ### Uploading to locally mounted shares
 
 You may also send backups to a mounted share (`NFS` / `CIFS` / `SMB` / etc.) by
@@ -369,15 +379,6 @@ For installations from source:
       remote_directory: 'gitlab_backups'
 ```
 
-### Specifying a custom directory for backups
-
-If you want to group your backups you can pass a `DIRECTORY` environment variable:
-
-```
-sudo gitlab-rake gitlab:backup:create DIRECTORY=daily
-sudo gitlab-rake gitlab:backup:create DIRECTORY=weekly
-```
-
 ### Backup archive permissions
 
 The backup archives created by GitLab (`1393513186_2014_02_27_gitlab_backup.tar`)