The place to begin is to consider what an annotation is. It is simply commentary on the text you are reading. Usually, its primary purpose is to help you engage with the text through an active and tangible form of participation. Secondarily, your annotations might be shared with others, classmates or colleagues, perhaps, or if you are very famous, others in hundreds of years might very well read your annotations!
From a mechanical perspective, there are four ways people annotate. First, they make notes in the text itself. This is referred to as marginalia. Some very prominent people, for example, Mark Twain and Herman Melville, have engaged in marginalia, and we study their annotations to this day. Second, people can annotate with Post-it notes, on the pages being annotated. If a book does not belong to you, this is one proper and respectful way to annotate. Third, you can write annotations on other papers entirely, but this has the disadvantage of having to keep track of other papers and not having the annotations in close proximity to the text being commented on. Finally, while I have not yet done this, it is my understanding that it is possible to annotate digitally, on an e-reader. If you have an e-reader and this interests you, how this done can be researched, or perhaps you have a friend who already knows how.
What should be the content of annotations? This is kind of an "anything goes" situation. In my own books, I annotate frequently in the margins, and this includes all sorts of content. Sometimes when I am reading, a scene reminds me of another book. I jot down that connection. Sometimes I use annotation as a way of identifying literary elements, so I will point out foreshadowing or an extended metaphor. I have made notes on my dislike or particular like for a character, and I have made notes on word choices and symbols in a text. Sometimes I disagree with the author about something and I write down why I disagree. In effect, I am arguing with the author. The idea is to fully immerse yourself in the book and respond to it.
When we annotate, we are fully immersed in our reading, active participants in the process. Choose the means by which you annotate, remembering that a book that is not yours should not be written in. Respond to your reading in your annotations. I promise you that you will find this to be an interesting and enjoyable experience. I have included a link below that has photos of famous authors' annotations of famous books that I hope you will enjoy.