How to upgrade & make a sophisticated dining spot in the living room?
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Find a gate leg table or one with leaves that fold down. And put this in one section of the room where you want the dining area to be, make the wall stand out behind the table with a new wallpaper, or curtain or a piece of art or even plants. A gate leg table can be folded down to a very small size but still looks incredible and you can highlight the dining area but not take up all the room when not in use.
I would choose a decorative large mirror to make the space look bigger. And have lots of lighting to brighten it up.
I'd say use a round table with no more than 4 chairs, the others tucked away and brought out if needed. Finished wood gives a softer look than metal. Maybe a mirror on the wall to reflect light as you said it's a dark house. Candles always are more intimate. Lighting is very important. If there's no way to hang a small chandelier, a floor lamp in the corner would work. A floor length tapestry tablecloth is elegant. Pick up the colors in the living room to tie it all together. I don't like tables always set with place settings, but many do so that's an option. Just experiment. Have fun!
i would do wainscotting to make the room have more depth and brighten up the place
Mirrors will help with the lighting, even a cluster of small ones as opposed to one large one. I like the fold down/gateleg table idea for you. If you have a standing table, always keep it fully 'set, napkins, candles and all. Fresh flowers weekly set off a room more than anything else.