Add the water and sugar to a large pot. Place over medium heat and stir constantly until the sugar is dissolved.
5 cups water, 5 cups granulated sugar
Bring to a simmer, stirring constantly, and simmer for 15 minutes. You need to make sure you keep this moving so the sugar doesn’t burn.
Take off the heat and allow to cool to room temperature.
In another large pot, add the water and instant coffee, stir to combine.
6 cups water, 1 cup freeze-dried instant coffee
Bring to a boil, stirring occasionally.
As soon as it comes to a boil, take off the heat and allow to cool to room temperature.
In a large container or pot, stir together the simple syrup and coffee mixture.
Add the rum and vanilla, stir to combine.
3 cups white rum, 2 ounces pure vanilla extract
Add to bottles and chill completely before enjoying as is or in your favorite cocktails and recipes.
Notes
Simmer the syrup carefully: Keep stirring the sugar syrup to prevent burning. Simmering it helps concentrate the sweetness without caramelizing the sugar.
Use pure vanilla extract: While you can use imitation vanilla, pure vanilla extract adds a richer flavor to the liqueur.
Cool completely: Be sure that both the coffee mixture and syrup cool to room temperature before adding the rum and vanilla to prevent any evaporation of the alcohol.
Customize the sweetness: If you prefer your coffee liqueur less sweet, reduce the amount of sugar in the simple syrup.
Label your bottles: If you’re gifting your homemade coffee liqueur, label the bottles with the date it was made and any special instructions.
Let it rest: While this is a quick version, letting the liqueur sit in the fridge for a few days can help the flavors meld even more, making it taste even better.