Combine the sugar and water in a saucepan over medium heat. Stir gently until the sugar dissolves.

Allow it to boil without stirring until it turns a golden brown. Pour the caramel into a round baking dish, tilting it to coat the bottom and a little of the sides. Set aside to cool.

In a blender, combine sweetened condensed milk, evaporated milk, eggs, and vanilla extract. Blend until smooth and well mixed, about 30 seconds to a minute.

Carefully pour the flan mixture over the cooled caramel in the baking dish.

Preheat your oven to 350°F (175°C). Place the baking dish inside a larger pan, and fill the outer pan with hot water until it reaches halfway up the sides of the flan dish.

Carefully place it in the oven and bake for 50-60 minutes until the flan is set but still slightly jiggly in the center.

Once done, remove it from the oven and let it cool at room temperature. Cover and refrigerate for at least 4 hours or overnight.

When ready to serve, run a knife around the edges of the flan to loosen it, then invert it onto a plate.

Cut into slices and enjoy!