How you repair water damaged drywall depends on how badly it is damaged.
Drywall is what is normally used to cover walls in the home, since it is less time consuming to install than plaster or stucco. It's made up of layers of paper pressed between gypsum plaster mixed with fibers of paper or fiberglass. The gypsum makes it fire resistant to a point, due to water trapped in crystallized fibers. Fire resistant rated drywall also has additional amounts of fiberglass to keep it together after the water drys up from the heat. On the other hand the drywall paper lining and plaster do not hold up well to water damage and what you do to fix the issue depends on how extensive the problem is.
Instructions
Mild Damage
1. Sand the surface of the drywall where you find the flaking paper and water stain. This is done on mildly damaged drywall that has no water issues behind the board. Use a fine sandpaper and smooth it out.
2. Smooth on drywall mud over the sanded area to fill in any dips that the sanding created and hide water stains. Smooth the mud past the sanded area and feather it out to the surface of the wall. Let it dry for a day.
3. Sand the dried patch area to remove rough areas. Paint the drywall repair to match the surrounding wall.
Major Repair
4. Cut the drywall damaged area out from the rest of the wall. Use a jigsaw or pull it out with your hands. Trim it into a flat edged space such as a square or rectangle, using a knife. You want to make an opening that spans to the studs on either side so there is a place to attach the new drywall section.
5. Measure the opening where you removed the drywall. Cut a new piece of drywall to fit the opening. Score the drywall on either side and snap it off. Place it in the opening and screw it down with drywall screws.
6. Spread a thin layer of mud on the outer seams with a trowel. Place strips of drywall tape over the mud while it is still wet. Smear on a second layer of mud to cover the tape. Let it dry overnight.
7. Sand the mud smooth and spread a second coating on. Feather it down to smooth it down to the wall. Let this dry for another day.
8. Paint the wall to match the rest of the wall.
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