Rinse the rice under cold water until the water runs clear.
In a medium saucepan, combine the rice, coconut milk, water, sugar, and salt.
Bring to a boil over medium heat, then reduce the heat to low and simmer, stirring occasionally, until the rice is tender and the mixture is creamy, about 30 minutes.
Remove from heat and stir in the vanilla extract.
Serve warm or chilled, topped with toasted coconut flakes or fresh fruit if desired.