I know Home Depot has some wood paneling that looks nice on walls. However I am not sure how that would look putting it over the tile and it could get pricy

Do I have to rip the tiles out and put in new drywall or is there a simpler way?

Simpler way to avoid putting in new drywall? It depends on the condition of the wall behind the tile. I doubt that you'll be able to avoid putting in new drywall, though. You need to patch the wall once you remove the tile, and if there's extensive patching to be done, it might be more cost effective just to replace that section of the wall.

If you want to remove all of the wall tile, but avoid having to replace all of the drywall, you could replace a portion of it with wainscoting. The tile ends too high to suggest wainscoting for the entire tiled portion, but you could take out the tile and replace a few feet with wainscoting.

What is that little ledge jutting out from the wall?

We just had our bathroom re-glazed. It looks fantastic, we did it all white and we now have all white clean bathroom. It was also not very expensive. I would recommend this option.

For a few hundred dollars, you can have the wall tiles spray-painted by a tub re-glazer. Durable and simple, but make sure to hire a professional (not a do-it-yourself paint kit, those are cheap and will look worse.)

Maybe you could embrace it for the time being by painting the walls and maybe the cabinets a different colour so your bathroom doesn't seem so industrial/cold. Also, light fixtures make a hell of a difference in a bathroom.

I've seen beadboard put up over tile for a kitchen backsplash so I imagine you could do the same thing in here if you don't mind your wainscoting going up that far. You could also try paint. I've seen it done with good results on SUPER cheap tile, but I think there's a big risk this tile would look worse painted. Can't really tell since I can't see it close up.

I think the bottom line question for you is, do you not like the LOOK of the tile or do you just flat out hate the tile's very existence? If it's the former, you can cover the tile with paint (you'll still see tile, obviously), wainscoting, etc.but if you hate the fact that the wall has tile on it, you'll want to tear it out.

I would focus my money and efforts on rooms that you will be spending a lot of time in. Paint the walls, maybe hang some artwork (no worries about moisture since there is no shower), maybe paint that cabinet and be done with it. Then you can think about what you would really like to do and completely transform the bathroom in a few years.

The lesson here is that if one plans on selling, don't spend your money "fixing up" your kitchen or bath in order to ask for more money. We passed over a lot of "recent renovated" houses in favor of one we could fix up the way we wanted.

Cover it with beadboard paneling and cap it with a 4 inch shelf. Great for small vases with flowers, totally paintable and customizable. If you don't like beadboard, go for the board and batten look that is so popular right now. It covers the tile and gives an older, cottagey feel.

The tile does make the room look a lot like the employee washroom at a recently remodeled Taco Bell, but on the other hand you could say the tile is a thoroughly neutral backdrop that won't compete with whatever else you want to do. Paint the upper walls a rich, deep cinnamon; add towels in an exotic color like marigold or malachite; throw in an interesting textured rug; fill that wall with some art that reflects an indigenous culture; optimize your lighting, and suddenly the tile is supporting your warm, interesting world-traveler bathroom. To me, it looks like the vanity might be the bigger eyesore, because the tile is so bland, you can upstage it easily, but people are going to have to look at that vanity.

Hi Megan, I am a lazy renovator and I would leave the tile, invest in a really cool vanity, and paint your walls an earthy tangerine shade. The tiles are in good shape and it makes for a very functional bathroom, you just have to draw the focus away from them. Drywalling a space that small wold be a fate worse than death....

You've got room for a funky cool piece of art over the towel rack too.

Another vote for leave the tile and replace the vanity with either a pedestal sink or a cabinet that is very dark/black. Paint the walls -- color depends on your style, but I would think a grey that minimizes the contrast with the tiles would be best. A smaller footprint for the sink will make room for a small rug, and you can also bring in color with art on the walls. I'd put a plant (orchid?) on that funny ledge by the toilet.

The tiles look great I would agree with a new vanity. Definitely a fern or orchid on that cute little shelf and some nice towels. Save your money for something important don't be wasteful, it looks great. Those tiles are for a reason, much better than drywall. What about a small chandelier.

I'm with MNTWMYN. I've seen several bathrooms where the homeowner has gone over the ugly tile with beadboard and then capped it with a ledge. It looks great...especially if you seen the tile behind it. I would think that beadboard or even horizontal 1x4s would be more in line with 1875 than the current tile. Best of luck!

If you have the budge to rip it out, then go for it. I see wainscoting or bead board.

If not, then tile can be painted.

In my experience sheetrocking is about the cheapest thing you can have done on a house. Get it priced out. You may be pleasantly surprised.

I would put beadboard over the tile before I would think about reglazing.

I don't doubt that the posters here who have done it have lovely bathrooms, but I've seen a bathroom destroyed with it. Imagine chipping off and showing the pink tile underneath. I don't know if it was DIY or what (they bought from a flipper) but it looked really, really bad.

the tile is fine..it will look better when you have some fluffy white towels on the bar..and i'd worry more about that vanity...i'd spend the money/effort there.

The tile can stay if you paint the walls and the vanity. You will be shocked at how much better the room will look with paint. Buy towels in colors you like to audition different colors against the gray. Gray can have a blue, purple, yellow or green hue that you may not notice until you put another color near it. if you find that the gray is neutral, you may find that a spa theme of neutrals in brown, grey, white is clean and attractive.

Once you have determined the underlying hue, you can make harmonious paint decisions.

A piece of artwork on the wall above the towel bar will eradicated the public restroom look.

Btw The towel bar is not in the right place, plus it is too big for a half bath.

This could be a lot worse. Why not just find a very large print, almost graphic wallpaper in the same muted colors, and put it above the tile. A new tile rack would also be in order.

It's a powder room -- it's a small project.

A beautiful powder really "makes" a successful (and welcoming) space for entertaining. (and an ugly one isn't very welcoming).

As a long-term renovator, I'd buckle-down, buy some good how-to books and get to work. Heck, you've bought yourself an 1875 home, and those always need work.

I'd rip everything out, and try to design the room to get rid of the odd wall-jog, perhaps disguising it by turning the toilet around to face the door, and making it a wall-mounted toilet, and so hiding the tank in the wall.

Think of this powder room as a little gem, and an ideal space to make into a showstopper -- with a beautiful antique marble vanity, mosaic tiles on the floor, stunning wallpaper on the walls... The options are endless, and are only limited by your style.

Here's some inspiration:

http://houseandhome.com/blogs/house-home-daily/decorating-finds/pretty-powder-rooms

http://www.chictip.com/design-tips/inspiration-10-beautiful-powder-room-designs

http://lifeandotherbeautifulthings.wordpress.com/2012/04/04/wallpapered-powder-rooms/

http://fermliving.blogspot.ca/2011/07/fashionably-late.html

http://chinoiseriechic.blogspot.ca/2012/05/my-favorite-chinoiserie-powder-room.html

We had hideous pink tile in our bathroom and we covered it in wainscot. It looks lovely. (We used wood wainscot which we polyurethaned several times.)

It's that sink and vanity that has to go! Replace them with a white sink. Have molded cornice fitted just above the tile and paint it white. Paint the walls black if you're brave or a deep charcoal if you're not.

Then bright yellow would be a great accent color for towels and a rug and other bits and bobs. And put a huge leafy plant on that little ledge thingy.

I replaced tile with beadboard and have to say, it is way, way easier to keep tile clean around the toilet if you have little kids or just in general. :)

I had a similar problem and just decorated around it. Our powder room is tiled floor to ceiling in a white glazed tile streaked with pink, with a pink and blue decorative trim about halfway up. We re-did the floors when we re-did the kitchen - they're now a 4" beige and white diamond patterened travertine (instead of pink and green tile mosaic - blarg!). I've put large Sid Dickens prints on the walls (something we had and that needed a new home - they're about 2.5 or 3 feet square) which partially covers the trim. All other furniture accents are dark wood, and the towel bar got changed for a smaller wrought iron looking ring with a dark brown towel. Sure, I still see some of that awful trim, but you really don't notice it with everything else being so coordinated. And I now find that the white tile walls help to frame everything else. Sure, I may not have designed it that way had I done it from scratch, but after the floor the whole "reno" cost me about $50 and I love the space - can't argue with that :)

So, that being said - see what you can do to design around it. I don't think the tiles are actually ugly, just super neutral. Remove / move the towel bar, add some art, do something funky with the walls that off-sets the grey. You might find it's easier to live with than you think.

I probably shouldn't admit it here, but I kind of like the gray tiles. I'd replace the vanity with something sleek and modern looking, paint the walls above the tile light gray and paint or decal on some white branches, maybe with blossoms and birds, in a vaguely Japanese way. Add white towels and a beautiful potted plant (maybe orchid due to low light levels) on that corner built-in... Maybe an elaborate mirror frame over the vanity for some textural variation. Embrace the monochroma!

I had some half-way up wall tile in a bathroom I hated so I just covered it with beadboard paneling. Too much trouble to rip it out in a bathroom that isn't the main one — unless you have tons of money to spend.

You don't even have any baseboard to remove, so you can just add a simple baseboard over the paneling to help secure it. (I glued my paneling in place with contractor adhesive.) Then I made a top edge from left-over one by one lumber mitered in the corners that secured the top of the panel, but you could use fancier molding. I painted mine with white deck paint and added a coat of poly for waterproofing. Make sure to acclimatize your paneling to the room before you cut it.

Or take the suggestion to have the tile reglazed white. There's so little of it, it won't cost much more than the paneling, and it would be a lot less work.

I'd also paint the sink cabinet white or replace it. A pedestal sink would be nice, but you probably can't do it without having gaps in the tile flooring. I liked Amaranta's idea to use charcoal paint above the white paneling to tie in the dark floor and bright yellow towels and accessories.

Wow, so many great ideas, thanks guys! I like the beadboard idea a lot! I can paint the vanity no prob, not sure if I'm ready to invest in replacing it. Also, thanks to the commenter who mentioned that in resale the new owners will want to make it their own taste anyway...thats' exactly why I didnt buy a more 'renovated' house!

Oh one question- how would the beadboard get applied over the tile??

I'm on board with all the other who said paint. It's a neutral enough tile, there's just nothing else in the room to keep it from overwhelming. I wish these posts had follow ups, though. I'd love to see what you finally decide.

vanities are cheap. as are sinks. if you don't want to invest in that, you probably don't want to invest in installing beadboard, much less ripping out tile.

I would start with decorating around it. Hey, it worked when I did it for a pink bathroom I hated. Paint, art, big towels on towel bar, plant on that shelf, rug or mat on the floor - if you use color, the neutral tile will go away visually. I would not paint new tile, only really old tile...reduces value of the place...painted tile is always a temporary stop-gap measure, not a real solution.

Then replace that vanity, really...as stated, with a pedestal sink or smaller modern vanity...that truly is the real eyesore here. And replace the ugly towel bar, too.