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Study your walls to determine where you want to show off the collectibles in the wall niche. Mark the outside dimensions of your niche on the wall with a pencil and a level. Make sure your corners are square.
Use a stud finder to locate a wall stud in the vicinity of the location you've chosen. The niche -- essentially a tall, shallow box nested in a wall cavity-- is to be installed over one wall stud and between two others so that it can be secured firmly into place.
Using a carpenter's square and a level, measure and mark the desired location for the wall niche. In our example, the niche is 26-1/2" wide, 18" high and 2-3/4" deep.
Score the marks with a utility knife and use a hammer to knock out the drywall.
With the drywall out of the way and knowing the height of your niche box, use a reciprocating saw to make a level cut across the stud on which the box will sit. Make another level cut of the same stud at the top of the cut-out area. Measure between the studs on either side of the cut-out area. If that area is larger than the outside dimensions of the finished niche box, you will need to nail 2" x 4" (or other) blocks on one or both studs to frame in the niche box (next to last step).
Before cutting the plywood, make sure you keep in mind the outside dimensions of your box. It's important. For instance, the depth of the wall cavity into which the niche box is to be placed is the width of a typical stud or 3-1/2 inches. That means that the outside depth of your box can be no more than 3-1/2 inches, which also means the inside depth of your box will be that dimension less the thickness of the back panel (3/4") or 2-3/4".
For the top and bottom panels of the niche, cut two pieces of 3/4" birch plywood to 26-1/2" (or your desired measurements) and 3-1/2" wide. For the sides of the box, cut two more pieces to 18" x 3-1/2".
Now measure and cut the back panel out of 3/4" plywood.
Place the back panel on a horizontal surface. Apply wood glue to all four edges of the back panel. Place the side pieces next to the side edges of the back panel to create butt joints; nail the side pieces to the back panel using 2-1/2" finish nails. Do the same with the top and bottom pieces, whose ends should now be flush with the outside of the side pieces. Wipe away any excess glue.
If you are planning to paint the niche box, prime it first using high-quality primer. Let dry, apply paintable caulk to all joints, and paint the box. If the casings you are using also need painting, paint them when you are painting the box.
Fit the box into the wall. Rest the box between the two studs that you cut with the reciprocating saw. If there's excess room on the sides of the box, you may need to nail 2" x 4" blocks to one or both of the studs on the sides to properly frame the box.
When the framing is all in place, attach the niche box to the wall studs using a nail gun. Make sure everything is level and plumb.
Measure and cut the fluted casings. Overlap the box edges with the fluted casings so there is a 1/4" reveal. Attach the casings to the wall with nails. Add rosettes in the corners to finish. Apply caulk to the remaining cracks and jointlines around the casings.