Microwave vanilla bean and 2 teaspoons water in a small microwave-safe bowl until softened, about 30 seconds.
Bring sugar and remaining water to a boil in a saucepan. Split vanilla bean lengthwise on a work surface; scrape out seeds with the back of a knife. Add seeds and pod to saucepan; boil until syrup is thickened slightly, about 2 minutes. Remove from heat and cool to room temperature.
A thicker syrup can be made by reducing sugar amount to 1 cup. The thicker syrup is more for iced coffee. The thin syrup makes great vanilla soda with 1/4 part syrup and 3/4 part soda water. The thin syrup plus sweetened condensed milk on shaved ice makes a great snow cone.
Store in the refrigerator until ready to use. I use clean Ball® jars for storage.
Syrup can be stored with or without the vanilla bean, but don't eat it.