What is the best way to cover psneling
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If you want to keep the same texture, just prime and paint. If you want a smooth wall, you'll have to fill in the cracks. You could also simply drywall right over it.
http://www.diynetwork.com/how-to/skills-and-know-how/painting/how-to-paint-over-paneling
Paneling can be painted or covered with wallpaper. If wallpapering there is a "filler" paper that goes on first. That "fills" the grooves in the paneling. Painting would be your less expensive way to cover it. You need to prime first if using latex paint. (Kilz would work well). Grooves will still be visible with paint. If using chalk paint (I use Annie Sloan, a little expensive but it goes a long way!) you won't need to prime or sand. I would suggest 2 coats for good coverage. It can be slightly watered down if need be which will make it go farther. Chalk paint needs to have a top coat or it can scratch easily. A roll-on matte (low shine) polycrylic would work great. Standard polyurethane will yellow in time. Polycrylic will not yellow, it is water-based. Hope this gives you "food for thought"! Do your due diligence research on both ways and you should end up with a pretty room!
https://www.todayshomeowner.com/how-to-paint-or-resurface-wall-paneling/
I painted the paneling in my basement. Used a primer and then coats of regular paint with primer. No need to fill in the grooves; just paint them and the paint covered the grooves beautifully. Before painting, I washed the paneling down with Dawn. It may take several coats but worth the time and way easier and cost effective than covering with wallpaper.
I don't want to keep the same texture but drywall is out of my budget at this time. I know a few years ago home depot had this stuff you could put on paneling and it would give it texture I went up a few weeks ago and they said they never heard of it.
You know Laurie, I might sand the paneling. Then get a bucket of joint compound and frost or butter the walls. It will look like old timey plaster.
I would not get the stuff you add to your paint to give it texture. After painting your walls it will be like sandpaper. Anyway mine were.
Good luck
You can use wood putty to fill in the cracks . Let it dry overnight then sand lightly to even it out. Apply a coat of primer over everything and when that's dry, you're ready to paint .