Bring the water and sugar (the vanilla is added later) to a boil in a medium saucepan over medium high heat. Continue to cook at a rapid simmer, stirring occasionally, until the mixture thickens slightly, about 8-9 minutes.
Remove the pan from the heat, stir in the vanilla, and cool to room temperature. Transfer to a glass jar or bottle with a tight-fitting lid and refrigerate.
Storage: The syrup will keep in the refrigerator for 4 weeks or more. Eventually, the sugar may begin to crystalize on the side and/or bottom of the jar or bottle (the stirring from regular use tends to prevent this), but the taste will still be fine.
