Lightly toast coconut. I recommend preheating oven to 325 degrees F and spreading coconut evenly on a baking sheet. Bake for 5-8 minutes, stirring once or twice, until coconut is lightly golden.
In a small saucepan over medium heat, combine water, sugar, and salt. Stir until sugar dissolves.
Add toasted coconut to the saucepan and bring to a gentle simmer. Let simmer for 5-7 minutes, until mixture thickens a bit.
Remove saucepan from heat, cover, and let steep for 20-30 minutes to continue infusing coconut flavor.
Strain mixture through a fine mesh sieve into a bowl, pressing lightly on the coconut with a wooden spoon or spatula to extract as much flavor and liquid as possible.
Keep coconut syrup in bowl or transfer to mason jar and cool completely before using.
Store syrup in an airtight container in the fridge for up to 1 month.