In a medium saucepan over medium heat, combine sugar, stirring gently until melted and turns a golden amber color, about 5-7 minutes. Immediately pour a thin layer into the bottom of each ramekin, swirling to coat evenly. Set aside to allow the caramel to harden.

In a mixing bowl, whisk together the milk, eggs, sugar, and vanilla extract until smooth and fully combined, about 2-3 minutes. Strain the mixture through a fine sieve into a large measuring cup.

Carefully pour the custard mixture into the prepared ramekins over the hardened caramel, filling each about three-quarters full. Preheat your oven to 325°F (160°C). Place ramekins in a large baking dish and pour hot water into the dish until halfway up the sides.

Slide the baking dish into the preheated oven and bake for approximately 45-60 minutes until set around the edges but slightly jiggly in the center.

Once baked, carefully remove the ramekins from the water bath and let them cool. Cover with plastic wrap and refrigerate for at least 4 hours, or overnight.

To serve, run a thin knife around the edges of each ramekin to loosen. Invert each ramekin onto a plate, allowing the caramel sauce to flow over the custard.