Combine the sugar and water in a small saucepan. Bring the mixture to boil, then reduce to low heat. Simmer 5-7 minutes (do not stir) . Remove from heat, then add the vanilla.
Let it stand for few minutes before serving or place the syrup in a container for future use.
Notes
Do not stir the syrup while it is simmering to prevent it from crystallization.
When you reheat the syrup in the microwave, make sure it is only for 5-10 seconds. It might get too hot and it might explode in the microwave if longer than 10 seconds.
If you are using a syrup container, make sure the container can be placed in the microwave for easy reheating.
You can also store the syrup in a wide-mouth jar or container so that it is easy to take out from the container and reheat if it crystalizes.