I was a beautician for years and one of my customers was a school principal. One day she came in and announced she was going on a cruise and was taking some homemade Kahlua with her, and she brought me a sample. Wow!! It tasted just like the real stuff. I couldn't wait for her to get back so I could make some more. I make a bottle every year at X-mas and my friends can't believe I made it. You can use a lower proof vodka if you like, but I like a little kick to it.
Bring the water to a boil and add the sugar. Stir until sugar is dissolved.
Add 2 oz of instant coffee, stir well and let cool.
When the pan is cool to touch then add the vodka... all of it to the sugar, water, and coffee mixture.
Split one vanilla bean in half length wise and add to the mixture.
Bottle the Kahlua up and let it sit for a week. I leave the vanilla bean in the bottle, and it doesn't go bad. You can add some Vanilla Flavored International coffee creamer to it and a splash of vodka and it makes a wonderful white russian.