We used to have a two storey house with us on the ground floor and then all other bedrooms upstairs. DD1 stayed downstairs, either in our room or in her cradle in the family room until she was about 4 months old and then she went into her room upstairs. DD2 was a bit more of a nightmare in terms of bad sleeping and constantly feeding so she was downstairs with us probably more like 7 months. By the time DD2 was 13 months the girls were sharing a room - their choice.

My kids ended up co-ordinating their day sleeps - more my self preservation I think because neither were good at going down for a nap so unless I put them both down together it just didn't work.

I don't think there is any right or wrong way to do it - you work with the space you have and whatever gives the best overall result. Probably nothing is going to be perfect. I personally didn't like the girls being upstairs at night when I was downstairs - they felt so far away, even though we had monitors etc. We had a seriously enormous house though, and TBH it was probably more my issue than a "real" issue IYKWIM.